Some people think property investment is easy, but unless you’re buying and selling homes on a daily basis there are going to be some pitfalls. Yes – it’s true that if you know what the classic mistakes in property investment are then this should help keep your losses low or at least prevent them from becoming too high-risk investments with little chance for profit; however, knowing these can take time so don’t start off expecting immediate success.
It’s no secret that property investment can be a great way to build your wealth over time. However, many people make mistakes when it comes to investing in property, which can lead to big financial losses. Below are some of the most common mistakes made in property investment, and how you can avoid them:
- Buying on impulse.
If you find yourself in the market for a home, don’t get caught up with all of your options and then change them later on. In this case it can be difficult because there will no longer be anything left that fits what we want- but when people act too quickly when the market is hot, things often happen without much consideration and they end up spending money on something they don’t need, or even want.
Your purchase plan will determine the type of house you’re looking for, so decide on an investment strategy before getting a mortgage or making any payments. Owning multiple homes can also work well depending on your situation and desired lifestyle goals, but it is best to first figure out what property suits best for your investment.
- Not doing your own research.
It is common for first-time property owners to rely on an agent to find them a house. Sure, it is convenient, but keep in mind that agents offer properties that are not always based on the needs of their clients. They offer properties wherein they can make the most profit from commissions.
It is therefore important that you do your own research when investing in property. While you take into account what your agent tells you, it helps that you have a background of the properties you are looking at and see which of your options proves to be worth your money.
- You think that the property will stay as is.
Buying a property is just the start of your worries. You need to look after it constantly, so that you can protect what’s yours and make sure any investment doesn’t go down the drain.
Regardless if you bought the property for re-selling or renting out for cash flow purposes – you still own this place as your asset. Disregarding the need to maintain it may reduce your property’s value and may lead you to spending more for repairs later on.
- You think that a handshake closes the deal.
When negotiating a property deal in the UK, don’t be fooled by someone who offers you their word as if it were enough.
Once you have reached an agreement with your seller, make sure to have everything written on paper. Hire a solicitor to draft, revise, and finalise the necessary contracts for you and the other involved parties to sign. It’s only when they sign on paper and give you the keys to the property that everything becomes officially yours.