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\u201cThese types of decisions can impact you more than just financially.\u201d

Sharon is joined today by IT professional, David McCracken. Having been investing in property since he was 23, David has a lot of experience with the market. However, he brings with him today not a story of success, but rather a tale of what not to do.

David had toiled hard to build up a property portfolio based entirely in Victoria. With land taxes rising and identifying a need to diversify, in 2011 he bought a few property reports that led him to consider Gladstone in Queensland as a potential market.

However, he didn\u2019t buy there until 2012, meaning the data he had used to make his decision was at least one year old. But he had already set his mind to buy there, and didn\u2019t really reconsider or reevaluate this decision.

At the time Gladstone had a booming local economy due to gas-related projects on the way. Vacancy was basically 0%, rents were sky-rocketing, and it was typical to wait two hours for a meal at the local pub.\xa0

David bought two established properties, which he now identifies as the one thing he did right. Had he bought from house and land developers, things may have turned out a lot worse than they did. But it was obvious to him at the time that that would\u2019ve been a poor choice.

He paid $530k and $600k for each of the houses, and immediately found tenants for both, charing $900 and $1100 per week respectively for them. Things were going all right for about a year or two, but then a glut of new developments, coupled with a fall in the worldwide demand for gas meant that the local market started to falter.

David kept thinking things would bounce back, but he slowly watched his investment fade. In the area rents dropped, vacancy rates increased, and tenants became more demanding. His rents decreased by about 65%, and the properties are now worth about half of what he paid.\xa0

After four years of hoping for an upturn, he finally faced facts that he was in a bad situation. David never wanted to have his mental state and wellbeing linked to his finances, but it was hard not to. He wanted to be in a different situation as he approached 40, but now felt as if he was back to where he was at age 25.

David\u2019s life was affected by these experiences. He opened multiple bank accounts to help manage his dwindling finances and had no real cash buffer to speak of. He put on weight, lost his mojo, and ceased acting like his normal happy self. This led to his relationship with his fianc\xe9 breaking down, and he has experienced firsthand how his bad decisions can impact on people more than just financially.\xa0

To get himself out of the muck and mire, he has since contracted a property investment advisor to help him strategise his next moves. David feels it\u2019s good to have a third-party to run plans passed. He has tried to sell the cheaper of the Gladstone properties, but has had no luck.\xa0

David\u2019s closing advice to others is to apply the required due diligence and risk mitigation to investment decisions. He acknowledges that he never paid enough respect to market timing. In the time between deciding to buy and actually buying, the properties had increased in value by 20%, and this should\u2019ve been an indication to him that he had missed the opportunity. He would also use an advisor if he had the time again, and had made a commitment to use one for all future property purchases.

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About Sharon\u2019s guest, David McCracken\u2026

David is an IT professional who has worked for most of his career in the energy and banking sectors. He has been investing in property since he was 23 and at one stage owned 7 properties. His early successes in property investment led him to being featured on the front cover of Australia Property Investor magazine and on Sky News.

About your host, Sharon Taylor\u2026

Sharon heads up the research division at Performance Property Advisory. She is responsible for the aggregation of economic and property data sources, as well as deep analysis of the data to provide quarterly reports on each capital city of Australia.\xa0

These reports identify between 5 and 8 submarkets in each capital city, and provide an opinion as to the short term performance of each submarket. This information is vital for clients to maximise the performance of existing assets, and also for selection of new blue-chip investment locations.

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\u2018The Property Pineapple\u2019 is one of three segments you will hear on the Performance Property Data podcast. Released fortnightly, and hosted by Sharon Taylor (Research Analyst - Performance Property Advisory), the show presents listeners with stories from real investors, discussing their wins and admitting their losses.

\u2018Property Insiders\u2019 are also released fortnightly and are conversations between David McMillan (Director Acquisitions - Performance Property Advisory) and industry leaders offering knowledge and expertise.

And \u2018Performance Insights\u2019 are released every Wednesday and Friday, giving you technical information and the lowdown on key property markets around Australia.\xa0These episodes are also available as short videos at our youtube channel.

For more information about how Performance Property Data can help you maximise your investment dollar, head to www.performancedata.com.au