5 Biggest Mistakes In Buying Property

5 Biggest Mistakes In Buying Property

1. You buy property to avoid a lifetime on the pension.

The sad fact is that if you are like most people you will end up on the pension. Like most people who buy property you can only buy one or two or three and you end up on a poverty pension worried about your ongoing repairs and maintenance costs.

Why? Because you relied on the one Broker or the one bank.

You then find that you are handcuffed to their policy decisions and their advice. The sad fact also is that the person giving you that advice will also end up on the pension. The poverty cycle. Poorly educated people giving their poor advice to people wanting the best advice.

The solution? The Club benefits from a national group of fund finders dedicated to you. Not their back pocket. No, they know like for others over our 25-year cycle, if they don't look after you then they can be sacked and in one case referred to the Government authorities to be pursued for compensation. We look after you, not the banks or the Broker.

This is the most important lesson to learn in retiring wealthy.

2. Trusting your builder

You have no other choice, right? The building looks attractive, the agent selling it says it is, so it has to be right? Again going back to the 95% of people who fail with property and end up on the pension, just like those who trust their Brokers buying shares and end up on the pension, you can't trust people!

Though the builder may be building with lightweight materials. How do you know they are lightweight? How do you know their movement won't allow water penetration and leave you with a $60,000 bill to fix it. Particularly after the warranty expires!

In the Club, we run a black ban list and refer to this to keep the bad builders out! To the new builders, we ensure they build quality, solid materials into their building. If they must use lightweight then we insist that they give a personal guarantee that they will honour any water entry repairs and costs themselves.

Guess what? With the over 400 hundred builders that we are contacting annually, only two have agreed to give this!

The rest who produce lightweight construction are rejected by the Club. Are you buying one of these rejected properties?

3. Location

You have heard this from me before but, you must buy the right property in the right location with the right funding, the right construction and the right leasing agent to bring together a successful property that long term will keep you from the pension and give you instead, a quality lifestyle.

In the Club we have come up with 13, not 5, factors to look for in a successful property investment. With location, we subset that down into a number of other factors. Look for our rating sheet.

When you buy a car you buy a magazine to compare different makes and models. You look for the star rating in the category that you want. If you want economy you look for the one that has got 5/5 for economy not 3/5 for economy. Got it?

Well, we have done the same thing with property haven't we. We have simplified the task of comparing properties all around the country and all types of property into our ratings sheet. Ask for it and protect yourself.

Which is the right location for you?

4. Inclusions

One of the reasons we started finding properties and recommending them for you was that we would let our members go out, search for properties, bring them back and we would evaluate them saying yes or no.

Finally, after many frustrations one of our members, in fact a couple of architects, said: "You go and find it for us." The simple thing is, two identical properties side by side would appear to be so but it is the inclusions that make one a successful investment and one much less so. One enables you to hold it for zero dollars a day and the other one costing you an arm and a leg.

5. The next trap is, buying a property and then seeing the back of your selling agent or marketer

Where do they live? Who have they helped in the past? What support network have they got of you if you run into a problem with the quality of the stock or the location of the property or not finding a tenant or a problem with the builder or even down to the tax audit?

What free help can they give you? Perhaps that is the biggest trap of all, and that is why we started the Property Club. So that it is free today and free forever and there to help you avoid the traps that I wanted my mates to avoid when we started the Club.

Kevin Young // Property Club Founder

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