Mistakes made by those who buy property as an investment
The main pattern that unites almost everyone who invests in real estate is that they buy a property and never sell it. This pattern is the enemy n ° 1 to obtain high sustained yields over time. As in any business, buying well, that is, below market value, is key, especially in real estate investment that has high transaction costs, although it is true that it is very difficult to achieve this without being a sophisticated investor. But in the sale, a process that is usually easier, is where investors usually fall into the trap. And the name of the trap is not to sell at the appropriate time. This error has a negative impact on performance, even much higher than the one that has wrong buying. Invest your money in the peak Cambodia, it will be worth your trust.
There are several myths that have been taking root in investors that facilitate falling into this trap. These are the most common:
Believe that the brick always rises and never falls
It is demonstrated that if a strong appreciation of a property is achieved for more than 5 years, it is difficult to maintain that.
The problem is that when the property is at a very high price and although it is easy to sell it since there is usually a lot of demand, most do not sell thinking that the value will continue to grow at the same rates. And that’s where the big mistake is made.
Not measuring the achieved performance or its potential. Nor compare it with other investment alternatives to decide what to do
The effort and hours of work that many people do in their different professions and activities to gather enough money to buy real estate are very large. But in most cases, after achieving it, the focus is not on maximizing the return on that capital. Instead, we think about generating enough money again to buy another good and keep the previous one.
Not distinguish between real estate investments and real estate for own use. In the first one you do it to earn money, in the second to enjoy
It is important to separate what is real estate for investment use because mixing them is very likely to make the mistake of acquiring properties that are supposedly for investment but are not the most appropriate to generate high returns. These also tend to have limitations to execute an active management, i.e. buy and sell at the most convenient time.
A question of comfort and lack of knowledge: “So I’m going to sell it, what if I’m wrong?”
It is generally uncomfortable to have to be informed, trained and seek opinions from different real estate, financial and tax advisors, among others, to achieve an objective vision and be able to make a decision, but if you do not do it, nobody will do it for you and the cost of not doing it is very high. If you invest in the peak Cambodia, you will not feel hesitated, as it is going to be the next big thing.
Immobilize thinking about the cost of exit: “If I sell, I will lose an X% in commissions, writing costs, etc.”
When it is sold you must assume costs of deeds and commissions and this is often a limitation. But the issue is thinking how much you stop winning if you do not sell. These costs must be taken as part of the operation.
