Mistake #3 “this one nearly crippled me …”
And finally, the one mistake that nearly crippled me.
I started investing in 2003, and for the next 7 years, I’d been buying up a storm in Christchurch. I got lucky. Things had gone well.
Then in September 2010, the first earthquake hit the Garden City. Houses were severely damaged. But it was the second one that really messed us up.
I had tenants who couldn’t stay in their houses. They had to move out, so there was no rent coming in … but the mortgages still needed to be paid.
On top of that, I was a mortgage broker. My business stopped the day the earthquake hit. I couldn’t write any loans – the banks weren’t lending money.
But the big mistake was that I’d only ever invested in what I knew – Christchurch.
Had I owned properties around the country, things still would have been hard ... but would have been much easier.
Think about it, there was no way for me to sell a house in Christchurch at that time to free up money. Nobody was buying anything.
But, had I a few properties in Auckland – the property market was still functioning, so I could have sold a few to ease the cash flow.
So the lesson is, you need to buy property around the country.
If you live longer than 50, you’ll have one of those “once every 50-year” events in your lifetime.