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Become A Millionaire Property Investor This Christmas

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Contributor:
Brian Dalley
Brian Dalley

Often I am accused of being bias when it comes to property investment and I can live with that. We are all different and that I am thankful for, it would be boring if we all had the same views however, this week I am going to warn people to proceed with caution over the holiday season as some (not all) prepare to feast on the ill prepared.

Some of the projects I have investigated recently have over stated benefits but as they are (only an opinion) they get away with it. Just because someone tells you, they have made millions buying and selling property it does not mean investing in property will take you down the same path.

If you are not familiar with an area DO YOUR HOMEWORK even if you are familiar with the area, do you have a business plan?

Just last week I meet with a person that had been talked into, or should say, hoodwinked into signing up for not one, but two serviced apartments in an average area of Auckland. It was very clear after a quick chat that emotions had taken over as he kept referring back to how nice the property looked (it is new) the furniture package (the bling) and the rental guarantee (two years) looked almost too good to be true. He started to challenge me when I smiled at his reasoning. To top it off he tried to justify his decision by saying he was lucky, as there were only six left.

Rarely is a sale made without emotion being an influencing factor and as I point out in my book, when investing in residential property you are in fact setting up a business, so leave the shiny things to the magpies and instead focus on the business aspect.

It was soon evident that the best thing this person could do was walk away. He was heavily reliant on the rental guarantee and the prospect of capital gain of which there was no supporting evidence.

One must remember that property does not always increase in value. Sure, over time it does, that is basic economics 101 however, there are times when values slide below the bar.

This is where many people wanting to become property investors go wrong, they get so hung up on returns and the bling, they forget it is a business and a raft of other factors get overlooked. They only see what they want to see much like the opponents to residential property investment only see the down side.

Sure, look around and see what is available but remember you are in holiday mode and life tends to take on a new look when on holiday.  At the very least, insert a due diligence clause.

So back to the caption Become a Millionaire Property Investor this Christmas Kick back, relax and give it some thought, for if you play by the rules you may very well become just that.

Soon we will be doing a piece on investing in holiday homes with family and friends. Many choose this option so they can enjoy their investment along the way, interesting thought don’t you think.

Brian Dalley is a leading Property Consultant | former NZMBA Mortgage Broker, and Real Estate Agent. You can read more of his views and opinions on his website www.propertyprofit.co.nz. 

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