Investing in Property for Beginners: 5 Mistakes to Avoid
Many investors make mistakes, including experienced ones. I wouldn’t be able to make you aware of the problems that can arise if people hadn’t made them already. Investing in property, for beginners, is a make-or-break moment. It’s easy to make mistakes if you don’t have the knowledge required, so read on to learn the top five things you need to avoid and get yourself ready to invest.
Know Your Objectives
One of my favourite quotes, “If you fail to plan, you plan to fail”, speaks volumes. If you don’t know your end goal, how are you supposed to reach it? As tempting as it may seem, life is not about “winging it”.
Make sure you have a specific outline prior to making an investment. Know your reason for investing and how long that investment is going to take. There are a lot of things to consider when investing so make sure you have done your research.
Don’t Get Emotional
Buying your first home as a home and not an investment is a great feeling. We’ve all been there viewing houses to call our homes and emotions go wild when know you’ve found the right property. However, investing in property for beginners is completely different to buying a property as a homeowner. Think money, not how the property makes you feel. There’s financial logic behind a property, will it provide for your end goals and make the investment a profitable one?
Watch Out for Poor Financing
Investing in property with borrowed money can be a blessing, as long as you’re careful with it and understand the risks. If you invest using a mortgage you can expect to see interest payments being the biggest cost. The best finance doesn’t just mean deals with low interest so make sure to consult a highly rated buy-to-let mortgage broker who can lead you in the right direction with your borrowed money.
Manage Your Finances
It’s important that you keep your cash flow protected and set aside emergency funds to help in unexpected instances. If you’re prepared for any short-term shortfall you should manage to get by easily without affecting your investment journey.
I recommend that you also source a good accountant who will be able to assist with the tax side of things.
Don’t Self-manage to save Money
Investing in property for beginners might seem hard work especially once it comes to managing a property. I seriously advise against trying to save money by self-managing your portfolio. Managing a singular property might save you a very small amount of money in the right circumstances but it still wouldn’t be worth it in the long run.
I propose you consider employing a property manager on your very first investment. Let someone else take on the day-to-day hassle so you can concentrate on relishing in the benefits of investing in property. Want to become a master of property investment?
