Property investment: Do your own research and beware of hypes

BANKSTOWN, Australia - Aug. 13, 2017 - PRLog -- When you want to invest in property, you should beware of hypes. If you invest in a property where most people are investing, you may be joining a very risky game. You may feel that you are less vulnerable if you invest with other people who you think must've done their research. However, the risk remains the same. You can only minimise your risk by using your own mind to make a decision.

Before you invest your hard-earned money and take a risk, you should do your own research about different towns, suburbs or new developments.

You should be looking for potential traps and ascertaining your own personal and financial standing before making any decision. You cannot just assume that because many people are doing it, it's safe or suitable for you to invest there as well.

Property investment marketing campaigns come with shiny brochures, easy calculations and promises of high returns but you should be aware of this hype and be able to differentiate a good deal from a bad deal.

During the upturn stage of a property cycle, investors often feel optimism and excitement because of the regions' growth in values. House listings will be quick and bidding wars will be all the rage. However, because of a fully active crowd, the market will soon be overvalued.

The slump stage will inevitably come next.

Investors will first see this a short-term setback but will soon experience fear and question their decision to invest. If there was a spike, property values will be stagnant for a year or two and those who are not financially prepared will often sell their investments. When the crowd is pessimistic, the savvy investors will come in. They will be able to buy cheap properties with the best opportunity for returns.

Remember that there is no one wrong time to get in a property cycle and Australia has a fragmented market which are defined by different price points, demographics or geographic locations.

There are sub-sectors of the market which have different mechanisms at play. Investors are just advised to take a step back to think through these mechanisms or drivers when faced with a hype.

A good commercial property in a capital city will always be in demand and tenants can help pay the mortgage. These tend to be more consistent and enjoy substantial capital growth in the long run. Mining towns may not be a long-term vehicle for wealth creation due to its volatility. Plan and follow your strategies instead of following the latest hotspot.

For more information about property investment in Australia, contact a Specialist (http://www.chan-naylor.com.au/contact-us/?utm_source=alli...) to discuss your particular circumstances.

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Source (https://propertyupdate.com.au/safety-numbers-rule-doesnt-apply-property/)