Buy the wrong property
Could you buy the wrong property?
Sure, but you could also buy the right one!
Truth is, buying an investment property is fraught with risk, but so is investing in stock, building your own business, or any number of wealth creation strategies.
To combat this fear you can:
- Talk to your Mortgage/Financial advisor, they will help you stablish the right type of mortgages, and consolidate your portafolio.
- Do your due diligence in the suburb where your investment property is located.
- Establish an exit strategy before you buy so that once your pre-determined parameters are “triggered” you can make decisions based on your investment strategy, rather than respond to the emotional upheaval that changes can bring.
Lose my job
Nearly everyone, at some point in their career, has been made redundant.
While it’s inconvenient, frustrating and perhaps even a bit scary, you can make this fear a lot less powerful by doing the following:
- Build up sizeable buffers for each property
- Set up an emergency fund for personal expenses
Using tax refunds, bonuses, gifts…any extra money you can, build up your offset account(s) to cover any potential investment property shortfalls and to pay your personal expenses.
Even though you should have an exit strategy before buying each investment property, when you have money set aside you gift yourself with time to make good decisions about your financial situation.
Other strategies you can use to ease your fear of investing in real estate include:
- Buying cash flow positive or cash flow neutral property.
- Trading your investment property if necessary to shore up your cash reserves.
Whatever your fears, the best way to combat them is to educate yourself and to make plans to minimise any potential negative impacts to your wealth creation strategy.
Bottom line, there’s nothing wrong with being afraid, but it’s important not to let the fear overwhelm you and prevent you from taking action.
Contact us to answer your questions or to guide you building your investment portfolio.