Too many young people are following misleading advice online and falling prey to the greatest real estate pitfalls, according to Sydney-based high profile business and finance leader, Ayda Shabanz.
According to Ms Shabanz, it is understandable that investing in the property market today holds negative connotations for Australians in their 20s and 30s, as they are hearing too many bad stories from their peers and reading it online.
“As much as the digital landscape today is a blessing, it can also be a curse. There is a lot of information online, and not all of it is suited to your situation. Just as you are advised not to search for medical diagnosis online, you should also not look for financial advice online either,” Ms Shabanz said.
One of the most common mistakes made today involves purchasing outside of your affordability, leaving too many people stressed and struggling to make ends meet.
“Just because a bank has offered to lend you a certain amount of money, doesn’t mean you should purchase a property for that sum. The amount of money you can be lent has absolutely nothing to do with your affordability, because there are so many other factors that need to be considered,” she said.
“A professional consultant will be able to work out your true affordability that will allow you to make a purchase and continue to live the life you have become accustomed to. Whether you like to travel, eat out, shop, and drive luxury cars, this is your prerogative and nobody should expect you to live without the things you value. A genuine professional can show you how to invest and continue to do life your way.”
Another common pitfall Ms Shabanz sees too often is investment properties chewing up far too much of the investor’s money in unexpected repairs.
“Repairs need to be done, and tenants do have the right to live in a safe home that functions as it should. A Pest and Building Inspection and repairs need to be done in a timely fashion to keep the tenants happy and also to ensure the property keeps its value. Unexpected repairs and maintenance cost money, as do compulsory inspections at the start, and this is a reason I advise investors rather purchase brand new homes. If you purchase brand new, maintenance costs will be much less.”
Ms Shabanz said she has personally had contact with many investors who purchased a renovated property, only to find that extra bedroom actually cannot legally be classified as a bedroom.
“Non-code renovations may look very professional, but just remember that the previous owner who renovated it may not have ensured the ceiling height was high enough for the extra area to be classified as a bedroom, for example. Not only is it inconvenient, but it reduces the value of a home and the equity in it,” she warned.
Finally, Ms Shabanz said other forms of investment may be more suitable for people who want to liquidise their funds quickly.
“We have all watched shows about house flipping on TV, where the investors purchase a property, give it a face lift and then sell it and make a sizeable profit, all within the 30 minute program,” she said.
“However, real life is somewhat different. Property, unlike shares, cannot be liquidised quickly. Even property in high demand areas still take 45 days to settle. This time on the market needs to be factored in to the investor’s game plan.”
To avoid these pitfalls and to discover your own personal financial goals, Ms Shabanz suggests her weekend workshops around Australia. She educates attendees with the knowledge and skills on how to create a financial plan that will give them the lifestyle they deserve and desirable options for the future.
With over 15 years’ experience moulding the local and national business landscape, Ayda Shabanz is most definitely the Gen Y and Gen Z expert in property and finance. She started her own company at age 20. This young finance and property mogul is absolutely passionate about business, and continues to educate scores of Australians on taking ownership of their own future. She passionately believes this important information should be available to everyone and regularly provides it around the country in the form of informative and inspiring workshops. Ayda also personally owns a multi-million dollar suite of investments.
Ayda is now the Co-Founder of several multimillion-dollar property and finance companies, She regularly contributes to Your Investment, Your Mortgage, Domain, The Courier-Mail, Sydney Morning Herald, Sky News, 4BC and Cosmopolitan.