As much as you are excited about the idea of making money by buying and selling your property, this should not be taken lightly. Whether you are making your début in real estate investment or not, there are some common mistakes you should always steer out from. Being well-informed of the investment process and being aware of the potential risks will not only allow you to build a strong plan but also, think of a plan B if things don’t go the expected way. To help you invest safely, we spotted four of the most common property investment mistakes to avoid.
Underestimating your expenses
Not monitoring your cashflow is one of the most rookie mistakes you can make. Having a negative cashflow puts you in a difficult situation and makes your property investment journey a living nightmare. To avoid that, you should always have enough cash reserves to counter any unexpected costs such as increased interest rates, an unplanned expense or void funding after a tenant left. Don’t forget to keep enough cash aside for your loan payments and any other extra expenses you may have.
Forgetting about doing your research
As we mentioned earlier, it is absolutely necessary for you to be informed of all the potential risks pertaining to your investment. To do so, you must do your research on all the aspects of the property from the neighbourhood to the plot and the rental market. When you are buying a property, make sure that you are not buying it with its load of hidden issues or selling it with them. Don’t trust blindly attractive discounts without actually evaluating the property’s value. Last but not least, if you are thinking about taking a loan, make sure that the property can be mortgaged. Having some damage or any big inconvenience with your property can play against you and your project attractiveness.
Not having a clear investment strategy
It can take some time but working on an investment strategy will help you better evaluate your financial situation to create an efficient investment plan. Not having a clear structure on your strategy can often lead to unplanned costs, move you away from your main goal and, well, panic if things go bad. Establish a clear picture of your goal and motivation and what actions to take to reach them.
Trusting only words
When you are investing in a property or in anything else in general, you want to make sure that you are accompanied by trusted professionals. Don’t trust everyone who comes at you with only but fine words and promises. If they insist on paying you cash, don’t come with a clear contract or give you a shaky quote, this is a clear red flag. Go for reputed and trustworthy property development companies that give you quality services and properties with a skilled team.
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