There are so many people out there these days giving property advice that it is hard to know who to listen to, what is right or what is wrong. Realistically these are some points that may be wrong for some people and yet right for others. But there are some things that put a limit to your growth.
- Buy locally, so you can visit the property
There are thousands of property markets around, why would you limit yourself only to your background?
Buying a property based on being able to drive there to check on it from time to time is not a solid research. If this is all you based your decision on, look at your strategy again.
Invest based on the best investment location, not on your location.
- Only invest in properties you would live in yourself
I have this debate with my partner many times. The goal of an investor is to take the emotions out of the purchase, and make sure that your prospective purchase suits the market you are looking to buy in.
There are plenty of properties around, that I wouldn’t necessarily live in, however they have a long tenancy history with great performance.
- Invest to take advantage of tax deductions
Negative gearing is a big one here. I have seen so many people that got caught out when they lose jobs and have a highly negatively geared property on hand.
If you are only buying a house due to the tax rules alone you can leave yourself exposed on many levels. What if the current rules change? There are plenty of talk about abolishing negative gearing…
- Buy a holiday home
If you want to derive a personal benefit from your property, then invest wisely so you can grow your wealth and will eventually be able to holiday wherever you like!
Holiday home investments typically have low growth drivers and while they may give you a great spot to take a vacation every year, they won’t add to your wealth.
It can be hard to pick the right property at any time, predict how well any area will perform is somewhat like looking at a crystal ball. However the above limitations can set you back on your tracks.