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    Not Creating

    Clear Goals

    Some investors may purchase a property without a clear goal of what they want to do with the investment. This can lead to costly void periods where the property isn’t being inhabited and therefore not generating income. The property purchased may not be the best development for the investor’s goals, which can cause issues in the long run.

    Before starting any investment journey, a clear plan is needed. Plans should include what exactly is wanted from an investment and what goals you want to achieve. After goals have been identified, investors can begin researching what property, locations, and returns will work to achieve the target.

    For example, if investors want to make quick short-term cash, then they can benefit from buy-to-sell or renovating BMV properties to sell. Research is required to learn how to do this, where would be best to purchase a property, and any financials to expect. For those with goals of generating a steady, long-term income, buy-to-let properties would be the best option. Investors should research areas with high yields, a growing market, and excellent potential for capital appreciation.

    Not Enough

    Research

    One of the main mistakes investors tend to make is not completing thorough research.  Having a complete understanding of the property, the prices, and the current market ensures the investment is worth it. Insufficient research can result in investors buying a property that is undesirable and is in an area that is decreasing in value. These issues will have many negative effects and overall lead to a loss in capital. Conducting your own research is helpful to help narrow down the investment options, then it is wise to gather information from specialists. They can help give an understanding of the market and what the best locations are at that time. To speak to an Investment Consultant, book your consultation here

    When researching it is important to consider many factors such as:

    Rental yields– This figure will give investors an insight into what returns to expect from a property.

    Location– Investors should look to purchase a property in a desirable location, with many amenities, good employment rates, strong connectivity, schools, and a strong demand for housing. 

    Risks– Many risks come with property investment, mainly market changes and bad tenants. It is important to be aware and prepared for any risks so they can be minimised.

    Demographics– Investors should research what specific target demographic of renters best matches the business goals before buying a property. 

    Incorrect

    Budgeting

    For investing to be successful, there must be a clear financial plan with well-calculated costs. Miscalculations can lead to costly mistakes and significantly impact an investment. It’s crucial to be aware of hidden costs associated with property investment and ensure they are all included in the plan. To avoid mistakes, investors should precisely plan and budget their finances. By understanding the required finances, investors can determine what property they can afford to buy.

    The costs investors include range from maintenance, taxes, fees, capital gain taxes, interest rates, and any admin charges. 

    Investors should always make sure there is a plan for the worst and create small savings to rely on if things go wrong. Costs like damage to property and bad tenants can be expensive and can’t always be avoided, so it is important to have money saved for circumstances that are hard to control. Investors should also always be wary and prepared for any potential void periods in payments, this can happen if the property isn’t housing any tenants or if tenants fail to pay their rent on time. 

    Poor

    Property Management

    Property investment requires constant work and management to be successful. Many new investors fail to properly manage their properties, therefore there are more problems later down the line. This is one of the main mistakes to avoid, getting a property manager/lettings team may be beneficial. Good property management ensures that the property will stay profitable and gain capital appreciation over time.

    Signs of poor property management:

    Not selecting the right tenants- Bad tenants can cause many problems for investors, they can cause damage to the property, fail to pay rent, and be an issue to neighbours.

    Failure to collect rent- This can also include not properly handling late or missed payments, leading to a loss for the landlord. 

    Not quickly responding to repair requests- Not fixing issues when they arise can make the damage worse. It may also make tenants dislike their landlords if they feel their safety and comfort are not a priority. 

    Not performing property inspections- Inspections are crucial to ensure that the tenants remain happy and that the property is in good condition. It also gives landlords a chance to check for any damage that has not been noticed or reported by the tenants.

    To ensure good property management investors should perform background checks to allow tenants with a good rental history and references to be picked. Furthermore, investors should aim to collect rent on time, keep up with property maintenance and repairs, complete inspections, and keep good track of finances and rules.

    At CityRise we have an in-house letting & management team. They specialise in property management to ensure the best experience and create a hands-off journey for landlords. Having a team support an investment helps avoid making mistakes. 

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