Real Estate Investor Magazine South Africa December - January 2014 | Page 24

GETTING STARTED

BY KOOS DU TOIT

The Pitfalls Of Property
Invest right the first time!

T

he P3 Investment Group highlights 10
common property investment pitfalls...
and how to avoid these.

1. Speculating with property
Speculating with property - buying a property with
the hope of selling it at a profit in the near future –
can be dangerous. A superior strategy - focussing
on income generation - allows investors to avoid the
pitfalls of speculating, while still benefitting from the
advantages.
When you focus on the ongoing, long-term
income-generating potential of a property, which
keeps pace with inflation as the rental increases year
after year, you are likely to still obtain good capital
growth over time, ensuring the property can be sold
for a fair price in future.

2. A short-term perspective
A short-term perspective obscures the reality of the
property market, reduces the quality of investment
decision-making and overlooks opportunities to
build true wealth based on inflation-liked passive
income and capital growth that can accrue for
generations.
Your property investment horizon should be
the duration of a mini-cycle - at least seven years.
For great returns, keep your investment property
for at least a macro-cycle of around 20 years. The
longer you hold a property, the higher the return on
investment.

3. Investing without a plan
“If you fail to plan, you plan to fail.” A wellconsidered and thorough plan, essentially a
Roadmap to Wealth, allows you to avoid poor
decisions by focusing your enthusiasm on specific
objectives to be achieved within selected time frames,
while eliminating procrastination and indecision
by creating motivation, momentum and certainty
through a detailed step-by-step plan of action.

4. Goi ??????????)]??????????????????????????????????(??()????????????????????)????????????????????)????????????????????????)???????????????????????????)?????????q??????????????t????????????)?????????????????????????????????Q???)????????????????????????????????????????)???????????????????????????????????????)??????????????????????????????????????????)????????????????????????????????????????((????????????????????????()??????????????????????????????????????????)?????????????????????????????????????????)??????@? ????????????????????()=?????????????????????????????????????)??????????????????????????????????????)?????????????????q?????????t????????????)??????????????????????????????????)??????????????????????????????????????)???????????????????????????????????????????)?????????????????????????????????????)????????????????????????????????????????)??????????????????????????????????((?????????????((?? ??????????????)??????????((?
????????????????????()Q?????????????????????????????????????)??????????????????????????????????????????????)?????????????????????????????????????)?????????????????????????????M????)?????????????????????????????????????)?????????????????????????????????)?????????????????????????????????????)?????????????????????????????????????????)??????????????????????????????????????)????????????????????????????????????)????????????????????????????????????????)??????????????????????????????????????)????????????????????????????????((???????????????????)???????????????????????????????????????????)???????????????????????Q???????????????????)?????????????????????????????????????????)?????????????????????????????????????)?????????????????Q???????????????????????)?????????????????????????????????????)???????????????????????????%??????????()???????)???????????M?I????????%?????()??????????????????????????????????????????)??????????????e?????????????????????)???????????????????????I????????????????)???????????????????????????L????????????)???????????????????????????????????????)???????????????????????L???????????????)???????????????????????????????????????)??????????????????????????????????)???????????????????????????????????????)????????????????????????????????????????)??????????????????????????????????????)?????????????????????????????????@?e?)A???????]?????5????????????????????)??????????????????????????????????????)???????????????????????????????????????)???????????????????????????????????????)???????????((????5??????????????????)=?????????????????????????????????????)?????????????????????????????????????????)??????????????????????????????????????)?????????????????????????????????????)?????????????????????????????????)?????????????????????????????????????????)?????????????????????????????????????????)????????????????????????????????????)??????????????????????????????????????)????????????()IM=UI
L()@?%??????????()??????????????((