The 6 big mistakes to avoid when buying property. Mistake No.1 Buying in the Wrong City
Real estate is a very expensive teacher if you make a mistake and do the wrong thing. It could lose you a lot of money. Here are the six big mistakes I made that you should avoid when investing in property.
The first mistake is buying in the wrong city. Do not be shaped by this middle-class perception that you must buy your own home first. Making this mistake cost me $300,000. Most of the time where you need to live is not the best place to buy, and you may be better off renting there and buying investments elsewhere instead.
In 2004, Brisbane was at the end of a boom. From 1999-2004, prices in Brisbane doubled. We had family encourage us to buy in Brisbane because that’s where we were posted. But it was the wrong time to buy. What I should have done was to stay in a married quarter, pay cheap rent, and bought an investment property in Perth. In the next 5 years from 2004, Perth house prices doubled and I could have made $300,000!
Instead by allowing myself to be shaped by family and the desire to use the First Home Owners Grant, I bought in a dead market that was going nowhere.
A rising tide lifts all boats. If a city starts booming, the whole city and surroundings will be booming and all real estate will be going up in value.
The rich teach their children to rent where they want to live and buy where it’s booming. If you’re thinking of buying your own home, I challenge you to reconsider this right now. Is the city where you are living about to boom? If not, then maybe you should be buying somewhere else.
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