Property investment is a lucrative way to save for the future and make the most of your finances. Many people consider property investment and unfortunately many people make mistakes. We’ve highlighted seven common mistakes that property investors can make and how you can avoid them.
- Lack of Planning
The Benjamin Franklin quote is something like ‘If you Fail to Plan, You are Planning to Fail’. When it comes to property investment, having a clear plan and strategy is vital. Many short-sighted investors are caught out by a lack of clear goals and a strategic plan. Property investment is a long-term game, with the greatest payoffs often years, even decades after the initial investment. Being methodical, writing down your plan and setting realistic goals and targets are vital skills for property investors.
- Emotional Attachment
Unwise investors are often far too emotionally attached to their property. Investment is a strategy to provide financial security for your future and a clear head and analytic mind are essential. Getting emotionally attached to your investments can make it harder to be objective, harder to sell and harder to make decisions about. Being realistic and detached can allow you to make better decisions and avoid this mistake.
- Ignoring Advice
Obviously, property investment is a personal choice, but many shrewd investors spend time gaining advice and tips from more experienced investors. Ignoring advice and thinking you know better than everyone else is a deadly mistake in the world of property investment. Getting advice from property investment experts like RW Invest is a great way to maximise your investment. Whether or not you choose to act upon advice you’ve been given is up to you but ignoring it is always a mistake.
- Following the Crowd
Unsuccessful property investors are often the ones who jump on the bandwagon, far too late to make any money. By staying ahead of other investors and doing your own independent research, you can be the first to make the most of lucrative opportunities. Looking at up-and-coming areas, city regeneration plans and areas that are due for redevelopment can be all be ways to stay ahead. By following the crowd, you’re joining an already competitive market, and putting yourself at an unnecessary disadvantage.
- Lack of Research
A lack of research is one of the biggest mistakes property investors can make. Factors like location, potential rental markets and upcoming developments make a huge impact on your property investment. Research is vital to profitable investment. There are so many resources available for potential investors to use and being uniformed is a mistake that is easily rectified.
- Excessive Risk
Risk is a necessary part of any investment. Every investment has the potential to go down as well as up. However, taking excessive risks can be tempting when you are looking for large rewards. By doing research, getting advice and being objective, you can evaluate the risks of potential investments.
- Forgetting Taxes
Taxes play a large role in the investment world, and your potential investments will make a significant impact on your tax status. Doing calculations without taking tax into account can mean the difference between profit and loss. It’s vital to factor in the tax implications of your possible investment and you can find all the information you need from the HMRC website.