Avoid the mistake of only investing in your backyard | Common Investor Mistakes [Video]

The more you know about the most common mistakes that investors make, the better your likelihood of building lasting wealth.

In this series of short 5 minute videos, I discuss the common mistakes I’ve seen investors make.

Today we discuss why it’s not a good idea to only invest in your backyard.

It’s important to get out of your comfort zone when choosing an investment area.

Watch Michael explain:

  • Most investors start by buying in their backyard – in their comfort zone – where they live or where they want to retire or where they want to holiday – all emotional reasons.
  • They think they know the property market because they live there – Knowing your local neighbourhood is not the same as understanding the property market or how property investment works. Mistakes2
  • Look what happened to all the investors who bought in Perth – property values have fallen for 4 years in a row
  • Of the over 300,000 properties on the market at any one time, less than 5% are investment grade.
  • If you live in the right suburbs in the right capital cities by all means become a local expert, but if not hire someone else to be your expert on the ground. Be careful who you hire – not an enthusiastic amateur, but a local area expert to a fly in fly out expert.
  • It’s arrogant to think that you can gain the same expertise that a professional buyers agent has acquired through hundreds of purchases.
  • You can research on the internet – but you can’t gain perspective or experience
  • I’m not saying don’t invest in your back yard – I’m suggesting that don’t only invest in your back yard
  • Avoid Fly In Fly Out buyers agents – they don’t have the on the ground knowledge – the local agents love them

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About

Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


'Avoid the mistake of only investing in your backyard | Common Investor Mistakes [Video]' have 1 comment

  1. Avatar for Property Update

    August 1, 2018 Alex

    Melbourne and Sydney residents account for about three quarters of all residential property investors. Buying in their own backyard strategy worked quite well for them in the past 5 years. And most of them who bought elsewhere were not so well off though. Nobody from advisors transacting hundreds of properties thought of Tassie anything other than a cool retirement island for Baby boomers some 5 years ago. Not much changed since be it sluggish economy, virtually stagnated population numbers, no mining in perspective and lowest average income. Yet again the reality of property boom defeats conventional wisdom.

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