4 Deadly Research Mistakes to Avoid At All Costs
Research is the lifeblood of a profitable property investment. Do it right and you’ll avoid buying a lemon. Do it wrong and you’ll end up losing a lot of money.
So what are these fatal research mistakes to avoid? Nila Sweeney, managing editor of Property Market Insider explains.
1. Taking research shortcuts
Cutting corners with your research just to trump other buyers is likely to land you in serious trouble. This is especially tempting when buying in hot markets where irrational buyers are competing fiercely over properties.
Don’t forgo your research no matter how good a property looks on paper. You still need to establish whether this property is a good deal or a dud.
The only way for you to find out is doing a comprehensive research and analysis. Without it, you could end up buying an underperforming investment or worst, a money-losing property.
You need to investigate what’s behind the statistics and apply your common sense.
At a time when a lot of information is available at your fingertips, you can’t afford to do too little research especially when such a huge investment is at stake.
2. Doing too much research
While not doing enough research is a risky move, doing too much research and getting bogged down with too much information is equally as bad.
This often leads to over-analysis and confusion, also known as analysis paralysis. Many newbie investors especially those who are overly risk-averse often suffer from over-analysis.
The best way to avoid this is to have a comprehensive buying criteria and focus on ticking them off.
If a property meets your buying brief and you’re financially ready, then you should be able to confidently move forward.
Having a structured research will not only save you time but also ensures that you’re focusing on the indicators that truly matters.
3. Trusting the statistics too much
Even if you think the source of information is reputable, you still need to verify these facts independently.
Property data and information can be skewed through misreporting or under-reporting. It’s your job to ensure they’re reliable.
Relying on the stats alone to make your investment decision is risky without verifying and comparing it with other available data.
You need to examine as many data as possible to see that they’re all showing a similar trend.
4.Skipping research altogether
Researching the market can be daunting. There are a lot of concepts you need to learn in a hurry. But this is not a reason to avoid it.
Investing without doing your due diligence is akin to investing blind. You’re buying something that costs you a lot of money and hoping that it will grow in value somehow.
There’s simply no substitute for research. You must do it if you want to succeed as an investor.
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This article was first published at www.propertymarketinsider.com.au
Managing Editor of Property Market Insider and a former editor of Your Investment Property Magazine.
Published 8 February, 2017.