Mistakes can be hard to admit because in doing so we have to acknowledge that we’ve somehow veered off course, and sometimes that’s a daunting prospect.
Where does that leave us?
How long will it take to recover and get back on track?
Although it might be confronting, mistakes associated with a property investment worth hundreds of thousands of dollars must be honestly conceded and more importantly, acted upon as soon as they come to your attention.
Failing to rectify investment portfolio faux pars can mean risking your financial future and while that might sound alarmist, it’s the simple truth.
Of course if you’re prepared to recognise and remedy your mistakes, the question then becomes firstly, how do I identify an issue and then, how do I make it right?
It can be challenging to admit a failing, but in order to achieve financial success; investors need to check their egos at the proverbial door and remove emotion from the equation.
Feelings muddy the waters of objectivity.
You need clarity when judging whether a particular property in your portfolio or even a potential deal is going sour.
Remember this is all about facts and figures.
If crunching the numbers leaves your asset wanting, it’s time to count the cost, learn the lesson and move on.
Investment lemons can come in many forms, including:
- A property you paid too much for at that’s still dragging your equity position down.
- An underperforming location that’s not kicking the necessary capital growth goals.
- An asset that doesn’t align with your overall investment objectives and strategy.
The longer you hold onto this type of under-achiever in the property investment game, the more damage you do to the overall health and wellbeing of your retirement fund.
Investment grade property should double in value every eight to ten years, so it can take time to recognise a property that isn’t ‘cutting the mustard’.
But once you determine a sinking ship is dragging your entire fleet of investments down with it, action should be taken as soon as possible.
As long as you continue to hold the dud investment you’re at risk of sacrificing a even more money through lost:
1. Opportunity – You need access to equity as an investor in order to maximise the full financial potential of your portfolio.
Consider a $500,000 property that attracts 5 per cent growth per annum, compared to one that realises 8 per cent.
The difference over 20 years is $890,000 worth of equity, which could give you enough borrowing capacity over that time to hold at least another two to three high growth assets in your nest egg.
2. Time – The more time you have up your investment sleeve, the more you reduce your risk exposure as an investor and augment your returns.
Think about the person who has 30 years to build sufficient wealth with property.
They have leeway to make a few mistakes and learn valuable lessons that can be applied to take them even further on their journey.
While the investor who only has ten years before retiring really has no room for error.
Now is the time to take action and set yourself for the opportunities that will present themselves as the market moves on
If you’re wondering what will happen to property in 2020–2021 you are not alone.
You can trust the team at Metropole to provide you with direction, guidance and results.
In challenging times like we are currently experiencing you need an advisor who takes a holistic approach to your wealth creation and that’s what you exactly what you get from the multi award winning team at Metropole.
If you’re looking at buying your next home or investment property here’s 4 ways we can help you:
- Strategic property advice. – Allow us to build a Strategic Property Plan for you and your family. Planning is bringing the future into the present so you can do something about it now! This will give you direction, results and more certainty. Click here to learn more
- Buyer’s agency – As Australia’s most trusted buyers’ agents we’ve been involved in over $3Billion worth of transactions creating wealth for our clients and we can do the same for you. Our on the ground teams in Melbourne, Sydney and Brisbane bring you years of experience and perspective – that’s something money just can’t buy. We’ll help you find your next home or an investment grade property. Click here to learn how we can help you.
- Wealth Advisory – We can provide you with strategic tailored financial planning and wealth advice. Click here to learn more about we can help you.
- Property Management – Our stress free property management services help you maximise your property returns. Click here to find out why our clients enjoy a vacancy rate considerably below the market average, our tenants stay an average of 3 years and our properties lease 10 days faster than the market average.
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