AS many as half* of all new property investors suffer from the malaise.
They either have a property or properties in their portfolio they’re reluctant to part with because they’ve ‘fallen in love’ with them or as a result of a deep sentimental attachment with the stock – it was once the family home, it’s in the same street or suburb as a family member or friend or it was built and designed by the investors themselves.
They’re also often concerned that the dwelling they’ve held so dear to their hearts may not be viewed in quite the same light by a potential buyer.
Performance Property Advisory Managing Director, Michael Sier, says although the majority of investors are well aware of their unwise attachment, they’re happy to eschew capital growth and solid rental yield in the hopes that one day the property will finally perform.
“Sentimentality gets in the way of why they’re investing in the first instance: which is to build their wealth and future security or that of their children. Sadly the fallout from this unerring attachment is that the performance of an entire portfolio will be dragged down by one or more non-performing assets.”
Mr Sier says while PPA’s findings show that 50 per cent of new investors suffer from this imprudent affection for property in their portfolio, all investors are liable to fall into the trap.
“This is not surprising given the sheer size of the asset and the amount of money investors need to borrow in order to purchase property, particularly in Australia where median prices can be eight or nine times the annual income of the buyer.
“It is often easier to turn a blind-eye in the hope that things will turn around. Sadly we know from experience that time only magnifies mistakes.”
How to side-step the problem
Mr Sier says for those of you who are serious about making money from their property investments, here is how to avoid becoming overly attached and if you already are, how to unshackle yourself:
*The findings were based on anecdotal feedback from the market as well as a review of 75 new PPA client portfolios over the past 12 months. At the advice of PPA, 100 per cent of these new clients have since disposed of or are in the process of disposing of their sentimental purchases in favour of high growth, high yield stock.
This media release featured in the Smart Property Investment story: http://www.smartpropertyinvestment.com.au/opinion/14639-6-tips-to-avoid-becoming-emotionally-attached-to-your-property
More about PPA …. The nationally based advisory firm is dedicated to helping time-poor professionals, business owners and entrepreneurs grow their wealth via high-performance residential property portfolios. As a comprehensive outsource property investment advisory service, PPA researches and acquires quality, high growth property on behalf of clients, manages and reviews property portfolios and facilitates the sales process should clients decide to sell.
For more media information contact:
Wendy Parker PR on 0422 694 503