Property investment is one of the best investments you can make. The rewards can be large, and it’s also one of the least risky ways to invest. While Walton Robinson can help with the purchase of your property, there are some mistakes you need to watch out for when you’re investing in property.
Here are a few of the most common property investment mistakes:
Not doing enough research
When you’re planning to purchase an investment property, it’s important that you’re educated. One of the worst things you can do is buy a property without being informed and doing all of the homework necessary to ensure that it’s a good financial decision. If you’re planning to invest in property you need to dedicate a lot of time towards choosing the best property possible. Look at previous sales in the area, speak to multiple agents, and ensure that you’re getting all necessary inspections and checks before you sign on the dotted line.
Procrastination
While many people are planning to invest in a property, only a small amount of people actually own one. Often the idea of actually investing in property and all of the research you’ll need to do can be daunting. You also may find yourself thinking “what if” and focusing on all of the things which could go wrong. Everyone has heard the horror stories about vacant periods, terrible tenants, repairs, and damage, but it’s just impossible to prepare yourself for every potential outcome.
Often people will say they’re “waiting for the right time” or waiting for an improvement in the market. While you’ll want to buy in a buyers market if possible, changes in the market can take years and if you’re procrastinating you’re missing out on capital growth. The longer you wait the higher property prices will become, and the less time you’ll spend owning a house and collecting rent.
Buying in a bad area
This one comes down to research again. The truth is, the area you buy in can be the difference between financial freedom and ruin.
Things to consider include employment growth, population growth, infrastructure, and consumer confidence. Ideally, you want to buy in an area which is about to boom, so keep an eye on the news for articles about new schools being built, market trends, and city sprawl. Analyse the area you’re looking into, compare supply and demand, and how many days properties are usually staying on the market for.
Getting attached
If you’re buying an investment property it’s important to remember that there’s a large difference between a property you’re buying as an investment, and one you’re buying in order to live there. Remember that you don’t need to love the house or think it has the “wow” factor, you just need to be able to make a consistent income from it.
A good way to stay detached is to not even look at photos until you’ve analysed the numbers. Take a step back and ask yourself if the property would appeal to the type of people you’re hoping will rent the house from you.
