If you have yet experienced a downturn throughout your career in property business, you need to anticipate it. A property downturn can turn investor into a panic mess, make poor decision, and end up with failed business. It is true that property market somehow can affect your property investment more or less. However, it is not the only factor that determine your success. What you need to remember is that everything in property market happen in cycle. There is always regular flow of things that happen from time to time. The more experience you are in this field, the more will you know how to handle a property downturn period like it is not that big of a deal.
Mistakes you shouldn’t do during property downturn
Property downturn can lead investors to excessive anxiety, fear, and stress. If it is not handled well, it can end up in bad decision making. Surely, a downturn can be terrifying because it is like your investment is being put on the edge. It pressures you to make quick decision out of fear and panic. Therefore, it is important to stay cold-headed and calm when this kind of situation happens. Of course, it is not easy but it is not impossible either. Here are some mistakes you need to avoid in managing property downturn:
- Over-analyzing the cycle. As mentioned before that everything happens in the market is a cycle. However, it is not a wise decision to time the market. You should know that even the experts can’t do that. It is wrong to think that selling your property and getting back into the market again when the situation gets better is a good idea. The truth is, there is no really such thing as the right or wrong time. Thus, handling property downturn by timing the market is a mistake you should avoid because it doesn’t work that way.
- Seeking help and advice from wrong people is also a mistake that most inexperienced investors do during a property downturn. You see, even the real experts won’t really know what’s going to happen. Prediction is prediction and that will make everything seems possible. When a downturn in the market happens, do not take advice from the wrong people or reading media reports. Sometimes media reports are contradictory and confusing at the same time.
- Focusing on finding a new hot spot. This is a mistake you are not supposed to make when a downturn happens. A hot spot today may become a nothing spot in the following years. Therefore, it is better to look for locations of investment property that will be able to outperform the averages in a long term. That’s why purchasing investment grade property in the right location is fundamental you should build from the beginning of your career. Checking the value too often is also a no. It will only make you more anxious and worried. Just make sure to treat your property like a business and do your usual homework to survive a downturn.