As of April 2021, home prices in the US were up 15.8% on average year-over-year.
There’s no better time than right now to get involved in investing in property. But if you do so, you’ll want to avoid the 4 most common property investment errors.
If you’re new to property investment, you should know it requires more know-how than how to fix a place up. You need to create a property investment strategy, get the right help, do your research, and prepare for additional costs.
We’re talking about all that and more in this quick guide to avoiding the 4 most common property investment errors. Keep reading to learn all about them.
1. Not Creating a Property Investment Strategy
Property investment requires a lot of money, even when you find a great deal like these opportunities. You want to make sure that you’re investing that money wisely. In order to do so, you need to plan.
Not having a plan is one of the most common property investment errors. You can avoid it by creating a property investment strategy before you ever get involved in the market.
Think about the type of house you want. Ask yourself what your budget is and if you have any other requirements. You should also consider what you can afford in terms of upkeep costs and what you’re looking for in terms of growth potential.
Figure out these things and create a plan that matches your long-term goals.
2. Not Enough Research Before Investing in Property
Planning should involve a good deal of research. You need to think about things like location and current economic trends. That’s because these things have an impact on your bottom line now and in the future.
Of course, you’ll want to look at things like average prices in an area as well as demand. But there’s more to research than that. For example, it’s not just about knowing where to buy land, but you need to know what you can build on that land as well.
3. Doing it All Yourself
You may think you have all the knowledge you need, but doing everything on your own could lead to serious issues. There are a number of experts that can help make purchasing a property smoother. These are professionals such as real estate agents, home inspectors, contractors, and lawyers.
These professionals will help you navigate flaws in homes and even neighborhoods. They can help you close transactions and give all the paperwork involved a once-over to ensure you’re making a good purchase.
4. Not Preparing For Additional Costs
If you’re buying a property that requires fixing-up, don’t underestimate those costs. Doing so can hurt your bottom line. This is why you need a home inspector to give you an accurate idea of what needs to be done to make the home liveable and how much that’s going to cost.
But you also need to think about what upgrades and fixes are essential and which are “nice-to-have”. As much as you may want to make your rental perfect, it’s easy to overspend on renovations and you may never get that money back.
More Like Property Investment Errors & Your Finances
The most common property investment errors are not planning, not doing sufficient research, doing everything on your own, and not preparing for additional costs. However, these are all easily avoided by following the advice above.
And for more sound advice on investments and finances, be sure to check out our finances section regularly.