When it comes to investing in property, one of the biggest mistakes you can make is buying the wrong asset in the wrong location. It’s actually worse than doing nothing at all.
I’ve seen so many people fall into this trap—buying into off-the-plan apartments, house and land packages, or properties in regional or mining towns—all because they’ve been sold on the dream that they’re going to make millions in a short period of time. Working with a buyer’s advocate could help avoid such pitfalls.
My own parents made this mistake. They bought an off-the-plan apartment in Maroochydore, Sunshine Coast, for $350,000, thinking it was a great investment. Eleven years later, they sold it for less than what they originally paid. A qualified buyers agency would have likely helped them make a more informed decision.
It wasn’t just the capital loss that hit them—it was the lost opportunity of not being invested in a better asset over those 11 years. That’s time they’ll never get back, and it took a huge mental toll on them. You don’t realise how much it hurts until you’re looking back, thinking, “We bought the wrong asset.”
To make things even worse, they repeated the same mistake with a house and land package in Truganina in Melbourne. They sold it for roughly what they paid, which might seem fine on the surface, but again, it was the years of opportunity cost that really hurt. At the same time, the accountant who recommended the property probably pocketed a nice commission, but my parents were the ones left dealing with the pain.
These are the real pitfalls in property investing—buying the wrong property in the wrong place. You think you’re getting ahead, but in reality, you’re setting yourself back three or four steps. In fact, sometimes you’re worse off than if you had done nothing at all. Working with the best buyers agency could ensure you make informed decisions.
On the flip side, even when people buy the right property in the right location, they often don’t hold onto it long enough to see the full rewards. It’s so easy to get caught up in short-term thinking. You might see a nice little gain and think it’s time to sell. But if you hold onto that property for 10, 15, or even 20 years, the returns could be exponentially higher than what you see in the short term.
Lately, I’ve seen this happen more and more. People buy a property, make a little money, and then interest rates go up. Suddenly, the cash flow gets tight, and they think, “Let’s just sell and take the easy way out.” What they don’t realise is that when they try to get back into the market in three, four, or five years, they’re facing higher purchase prices, new entry costs, and the frustration of having to start over.
When you invest in property—or any asset, really—you shouldn’t be thinking in terms of 12, 24, or 36 months. You need to be thinking about 10, 15, or 20 years. That’s where real wealth is built.
If you buy the right asset today, ensure you have the right financial buffers and cash flow in place, and hold onto it for the long term, you’ll be well-positioned to reap the rewards.
There’s a natural progression in every investor’s life. Early on, it’s all about growth. You want to see the value of your assets rise over time. But eventually, there comes a stage when growth isn’t the priority anymore, and that’s when cash flow becomes the focus.
That’s when you can sell down some of your portfolio to fund your lifestyle. But until you get to that point, selling early is one of the biggest mistakes you can make. Engaging a trusted buyers advocate through Henderson’s buyers advocacy service is your best chance at navigating the competitive real estate market.
