The biggest property investment mistakes you should avoid
Thinking about investing in the property market? While property investment can be a great way to boost your income and generate higher financial stability, it’s not something you should rush into. There are a number of steps every investor needs to take before purchasing their first investment property. Without doing so, you could be making a mistake and sabotage your chances of getting the outcome and returns you wanted. Here are a few of the biggest property investment mistakes that should be avoided at all costs.
Not thinking about your goals
Why are you thinking of investing in property? Whether you want to start saving an attractive retirement fund or you simply want a way to further your income, you should always have a goal in mind. Establishing your long-term goals is important as it gives you a clear idea on why you’re investing, the outcome you hope property investment will have, and whether you plan to make multiple investments and build a property portfolio further down the line.
Skipping the research
It’s so important to do thorough research on the property market before making an investment. Without doing so, you could end up investing in the wrong type of property, and in the wrong location. While London might initially seem like the best place to invest, the capital actually has one of the worst property markets in the UK. With decreasing property prices, low average rental yields and dwindling demand and rental price growth, those investing in London’s property market are likely to struggle to make a profitable investment. Researching the best areas to invest in, such as property hotspots like Liverpool and Manchester, is a key element of any property venture. This way, you’ll find details on the cities with the best rental yields, the highest levels of demand, and the best potential for capital growth — all of which make for a strong investment.
Another thing that’s important to research is the company you choose to invest with. There are so many property investment companies out there all claiming to have the best opportunities and the best track record for success, which is why you need to be selective on the company you invest with. When researching, look for companies with glowing reviews, such as rw-invest.com who have a reputation for good customer service along with offering properties in prime UK locations.
Neglecting financial planning
Last but not least, one of the most vital aspects of property investment is good financial planning. Without being fully aware of the financial side of the investment, such as working out taxes you’ll need to pay or considering whether or not you’ll need a buy to let mortgage, you risk harming the success of your venture. Once you’ve gone through with your investment, start an emergency fund, keep an eye on your income and monthly outgoings, and always leave a sum of money aside in case of emergencies. If you don’t feel particularly strong in the financial side of the investment, you can always hire a financial advisor or an accountant to keep everything in order and provide you with better peace of mind.