If you’ve been looking into investment options, you will have seen a lot of great advice about property investments. If you believe everything that you read, it seems like a really easy way to make loads of money without that many risks. Unfortunately, life is rarely that easy. If you get property investment right, it is a fairly safe investment and you’ll see some good returns. But a lot of people go in thinking that there’s no way that they can fail and they make some big mistakes. These are the most common reasons that property investment can go wrong. s
Bad Location
When you’re looking at properties to invest in, the building itself is obviously important. If you buy a tiny, run down house, you’re not going to be able to find any tenants. However, the location is just as important, if not more important, than the property itself. You could have the most amazing house ever, but if it’s in the middle of nowhere or it’s in a dangerous neighborhood, you’ll struggle to rent it out and you won’t be able to sell it on easily either. That’s why it’s so important that you research the location before you buy. Look into things like the local schools, amenities like shops, the crime rate, and the local property prices. If there are a lot of houses on the market for a very low price, that’s a big red flag and it probably means that the neighborhood is going downhill and people are moving away in large numbers.
Poor Maintenance
As a landlord, it’s up to you to make sure that the house is kept in good condition. If you’re not doing that, your tenants will move out and you’ll struggle to find new ones. Property management is a lot of work and so many people go into it without understanding that.
There is plenty of maintenance you will need to find the right help for, too. Whether you are looking for a commercial roofing company, or you need someone to replace the windows, it’s always going to be important to find the right team for you. That will help you in keeping the maintenance of the place going strong.
You can’t just buy a house, find a tenant and then sit back and watch the money roll in. You have to be carrying out regular maintenance on that house yourself or paying somebody to do it for you. That’s very time consuming and expensive, which brings us onto our next issue.
Miscalculating Costs
Before you decide to invest in a property, it’s vital that you understand all of the costs involved and you don’t overlook any of them. You’ve got to consider all of the other costs involved with buying a property, like taxes and stamp duty. Then you’ve got to decorate the place and make any repairs. Finally, you need to think about the cost of continued upkeep and maintenance.
Expanding Too Fast
Having a large portfolio of properties is a great way to make a lot of money, but so many new investors try to achieve this too quickly. Once they’ve got one property and they’re doing ok, they start buying up more and more. Before they know it, they’re unable to manage all of those properties and the upkeep costs spiral out of control. Slow and steady wins the race when it comes to property investment.
If you have realistic expectations about property investment and you do your research, it’s a great way to make money. But if you’re making these mistakes, you’re setting yourself up to fail.
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