Not all investors are equipped with the knowledge when it comes to evaluating their yields. Investors will simply delegate all the tasks to a person and do nothing except receive the yields. This is not good. More than anyone else, you have to know and understand how you calculate your Return on Investment (ROI).
Singaporean investors should be knowledgeable when it comes to their ROI so they will not lose money. There are a lot of investments here in Singapore but you have to be sure that it will yield correctly. Here are some mistakes investors make:
- Wrong calculation of Net Rental Yield (NRY): As an investor, you have to evaluate your yield for the specific property you just purchased. That is necessary but what’s get wrong? If the investor calculated a higher NRY when in fact it could be less. As a result, the investor will expect too much (theoretical) but receive less (actual) in the long run.
- Error of reading financial statements: Novice investors are still familiarizing the market. These people still do not know how to do or read financial statements. That is understandable but unless you put an effort to learn it, you will always speculate and you will surely lose a lot of money along the process.
- Wrong measuring tools for valuing a property: Gurus know what measuring tools to consider but if you are to do it alone, you will be confused. Gurus usually gauge the value of property using the indicative bank valuations, developer’s cost based approach, cost of land approach and many more.
Now that you know common mistakes, you can be cautious from now on. This is serious since it involves money. Be careful about your dealings and more importantly, you have to be knowledgeable.