Investing without a clear understanding of the risks involved is the fastest way to lose money. Relying on market trends without research and sound financial advise can often be disastrous for property investors. Here are 3 of the most important risks you should be aware of if you have any plans of investing in property:
Relying on the low interest rates. Sure, the record low interest rates have been enticing people to invest in property, as mortgage repayments have never been this affordable for a decade. One thing investors should keep in mind though, the interest rates will rise at some point. Although economists forecast this to gradually happen at some point next year, it is still best to prepare for it when the time comes.
Poor investment strategy. Property investment should reward you financially. If investing has caused more headache, it may be time for you to reevaluate your strategies. There are several ways you can make money out of property and it is good practice to involve a certified financial planner to provide you which options suit you most.
Purchasing in an overheated market. There are several suburbs in the country that you should avoid, especially those that have a huge disparity between dwelling construction and vacancy rates. Do not invest in property for the sake of getting into the market. Always have clear and specific strategies when investing.
Read more about this on the Your Investment Property website.