Property investment is popular for a number of reasons. There are far less factors to understand when compared to other kinds of investment. The property market generally stays at a nice slow pace compared to other financial markets. For some people, it’s simply a way of investing in something they already have a passion for. However, like any kind of investment, there are certain pitfalls to watch out for. Here are some of the biggest ones.
First of all, not going in with a plan. In any market, this is one of the most damaging mistakes new investors make. Trying to build up a healthy portfolio in real estate without any kind of plan is going to be near impossible. Even though this market is more simple than many others, you still need to have clear, measurable goals, and a method of reaching them. What do you want to achieve in the way of income? Are you in the property market looking for long-term growth or just some short-term yields? What kind of properties are you going to be targeting? When you have a plan and definite milestones, your investment will be much more successful.
The next mistake I’ll cover is really two polarised ones. Either making impulsive decisions, or being too hesitant, and letting opportunities slip by. These two traits lead to countless hopeful investors failing at their very first property. It’s fairly common for people to attend one zany seminar, and buying into it straight away. They think this will make them rich overnight, lose all their capital, and then withdraw from property investment in distaste. Or, you may have the opposite problem; reading up every book and guide, filling up with conflicting observations. Having soaked up all this information, no big decision seems right. Then, you end up hesitating and procrastinating while the market shifts. Forbes has an interesting feature on this phenomenon. Try to find a good middle-ground between these two approaches before getting into property investment.
Finally, neglecting legal assistance. This is another surprisingly common one. Buying a property obviously requires a lot of capital. When they’re working out a purchase, some people will hate the thought of legal fees on top of it all. However, you’re much better with a solicitor than without one, especially if you’re new to property investment. Various legal firms such as Bannister Preston Solicitors exist that specialise in conveyancing. True, you could take care of the conveyancing yourself. However, a solicitor will be much better at handling the whole process, and won’t miss out crucial details. You should also remember that you may have sellers that dispute your offer for various reasons. You may also need to back out of a deal after putting down some earnest money. These are just a few of the instances where a solicitor can come in very handy.
Make sure to avoid these three mistakes when as you get started in property investment. Any kind of financial market has its risks. Knowing and understanding those risks is a great way to get started!
