Often, when I meet people for the first time and they find out how I help everyday people invest in property for their future with very little money, often using no cash at all, one of the first comments made and questions asked are “Sydney is the hottest property market for investors wanting to get into the market right now! And, Where would you buy an Investment Property in Sydney right now ?”
A savvy property investor that is looking to build a strong, solid investment portfolio that will work for them is not going to be looking at purchasing property in Sydney at the moment, as they are only going to be competing with very emotional buyers that will often pay too much for a property just so they don’t miss out.
This not sound Property Investing – this is buying based on emotion and fear of missing out or following the group mentality.
Investing in Property is all about the numbers, returns, research and timing.
As Terry Ryder from Hottspotting.com wrote in a very interesting and valid article in October when the Sydney auction clearance rates started to soar.
“The greatest folly current occurring in Australian real estate is Sydney’s auction frenzy. People participating in it are, by Buffet’s definition, fools. They are people with more money than sense. Buy in haste and repent at leisure is the unwitting catchcry of such people.
If you don’t have to buy in these areas but are buying anyway, you’re part of the folly.
Possibly there are home buyers who need to buy now and have little choice but to compete with other frenzied punters.
But investors have no such excuse. They have no pressing need to buy in these locations. The whole of Australia is their market and those with common sense and a healthy research ethic will be looking elsewhere.
There are hundreds of locations around the nation where investors can buy well with good prospects for future growth.”
When you buy in “hot markets” you position yourself with a heightened risk to be exposed to stagnant growth or even declining values over the next 12 or 18 months or longer. This will hinder you from building a strong property portfolio rather than propelling you forward.
Click Here to read the complete version of the Terry Ryder article on Avoid “hot” markets. Look elsewhere.