Did you miss the awesome video of Taz Nguyen last week?
If you missed it, you can watch it again here:
But today’s email is a bit more quirkier than that. Here’s my question:
How come you don’t get told at seminars what NOT TO DO when
buying a property? Is it that obvious? If it was then I definitely missed the
memo. Here’s a quick list of things NOT TO DO (and yes a more
than a few I’ve committed as sins myself!)
1. Paying Retail when the property has no IMMEDIATE UPSIDE. If
there is no IMMEDIATE UPLIFT IN VALUE or INBUILT PROFIT then
why buy the property? Because of POTENTIAL capital gain??
Good luck I say, because you’ll need it.
2. Renting out properties yourself – especially when you have no
management experience. I learnt this the hard way, the price I paid
was tragic – trashed house, trashed my confidence too. I thought that
because I could buy and house and the bank lent me money that I
was superman… wrong!!!
3. Buying Problem Properties Because They’re Cheap. I thought
only Asians bought things cheap, obviously I was/am wrong.
I see it all the time – properties next to train lines, main roads,
structural damage that’s not worth fixing, under flight paths,
flooded properties….and the list goes on. You can tell a hot
market when the C-grade property gets snapped up when they
would normally sit on the market for 3-6 months.
4. Buying Property just because everyone else is. You know what
I do when everyone else is buying??? I accumulate, and then
sell some. Yes I sell the stock I don’t want or can’t generate income
from – like vacant land. Interest rates can’t stay this low forever
boys and girls so be sure to have an exit strategy.
5. Buying development sites that you “think” will make a profit.
Developing can be one of the most dangerous things around when
you don’t know what you’re doing. Even when you think you know
what you’re doing you can be wrong part of the time. Having said
that what used to take me 12 months to do can now be done in
6 weeks. Property markets change so quickly these days that
12 months is actually a long time.
Recently I heard of a developer who took 2 years to get an approval
then build 4 townhouses. He was so lucky that it has been a
rising market, otherwise he’d be on the chopping block like many
were in 2008/2009.
Forewarned is forearmed!
Til next time,