Property investment is not just about taking advantage of the market opportunities, investors should also master the art of managing risks. The Property Observer lists the top 10 risks every property investor should overcome when investing in property.
- Opportunity cost. One of the most common risks for negatively geared properties. Ask yourself, whether the future opportunity outweighs the cost in your investment.
- Overconfidence. Having a clear understanding of the ins and outs of the industry is key for your success, but too much belief in one’s capacity to manage their investment takes a lot of time and commitment. Seek help from professionals if needed.
- Fear. If you play it safe, you will not lose that much, but you will never profit. Taking risks is key in property investments. Ease your fears with careful research and understanding of the markets.
- Naivety. Getting much of your understanding of the property market from a single person who push you towards poor investments is not the way to go. Do your research and get a second opinion to ensure that your best interest is taken care of.
- Over-ambition. Similar to overconfidence, this is what happens when you get in the industry with unsustainable goals. Purchase a property based on its practicality, not because of emotion. Have a clear understanding of what you can and cannot afford, especially if securing a home loan.
To read the full list, head to the Property Observer website.