There’s something that can happen to property investors when they get bitten by the real estate bug: they become addicted.
When they realise what is possible through property investing, they get so consumed and excited and motivated to take action that they can be tempted to take short cuts in their enthusiasm.
I’ve seen it happen before and I have to say – the consequences can be costly.
Which is why a new report that claims Australians are flocking to property investing due to a “fear of missing out” makes me more than a little concerned.
You see, property has the potential to be richly rewarding. I know from personal experience – and from guiding hundreds of investors towards their own financially prosperous futures – that investing in real estate can seriously change your life.
However, many investors simply aren’t doing it right. They aren’t doing enough research. They aren’t asking the right questions of the right industry players. They aren’t qualifying their experts, crunching the data on a suburb’s past performance or analysing the specific risk that a particular area or property poses.
Instead, they’re diving in headfirst into deals that could go nowhere – and this mindset and activity is increasing Australia’s vulnerability to a severe downturn, according to global investment giant PIMCO.
Worse still, when the market turns sour and prices begin falling, Aussies are just as hasty to offload their assets, which “increases the likelihood of asset price bubbles,” the study says.
The worst part about his for you is that the actions of uninformed, uneducated investors could impact the value of your property investments.
Let’s hope that investors begin exercising caution and using extreme due diligence when purchasing property. The banks are already doing their bit to encourage speculators to cool their jets; it will be interesting to see what impact this has on property markets in the months to come.
Til next time, happy investing!