Investing in the property market is very popular nowadays and can generate a regular income from rentals. However, there's a lot to know before you take your first step on this journey. In this blog, we cover some of the most common mistakes new investors make and how best to avoid them.
1. Failing to Research Thoroughly
You wouldn't go on holiday to a place you knew nothing about or buy a car without having some knowledge of it. Buying a property is no different.
Consider why you are purchasing real estate in the first place. Do you intend to live in the property or rent it out to others? Do you want to buy a property that needs work, so that you can renovate it and sell it for a profit?
You may also like to investigate what development plans there are for the area, the neighbours, the local amenities, and local pollution levels. Don't forget to check whether the area is prone to natural disasters too.
Research the price and the investment property interest rates. Look at the prices of similar properties in the area. If you plan to rent the property, what would be the going rate you could ask for?
As you can see, there is a lot to research!
2. Bad Planning
If you buy a house and then find out you can't use it for its intended purpose, then you will have wasted a lot of money. Something that was supposed to bring you an income could suddenly start costing you money in maintenance, taxes, and overheads. A bad investment may also be hard to sell on.
Check the property meets the plans you have in place and can deliver what you need.
3. Ignoring Experts
It can be cheaper and more empowering to go it alone however experts know the pitfalls that can come with property investment and can guide you past them. They also know a good or bad deal when they see one, meaning you are less likely to make a bad purchase.
4. Don’t Forget Your Target Market
Many property investors make the mistake of buying a property because they like it. However, this is only relevant if you plan to live there. If you plan to rent it out, then you need to consider what your potential tenant will want and need. Think about what kind of tenant you wish to attract and the amenities they will require.
5. Don’t Overbid
You've found the ideal property and you're excited at the prospect of buying it. However, it's important not to lose sight of what the property is actually worth.
6. Don’t Impulse Buy
The property might look ideal on paper however how much do you know about this property?
You need to consider why the property has gone up for sale. Check if the property has any foundation issues. If it needs renovating, is this work achievable with your skills and budget?
If you want to know more about property investment and how things like investment property interest rates affect you, then please get in touch via email at email@example.com. We can help you find the property you want and ensure you make a shrewd investment.