Juliet Risdon
Juliet Risdon is a Director of JML Property and a property investor.
Having established the company in 1994, JML Property offers Investment Property & Homes. It specializes in managing properties for owners and investors, and providing attractive and comfortable homes for tenants.
We are looking at the biggest mistakes made by new (and sometimes experienced) property investors.
This week we look at four more potential pitfalls to look out for if you are thinking of buying property…
16. Listening to unqualified advice
When it comes to owning property, everyone has an opinion. One of the biggest mistakes you can make is to listen to people who are not property owners. There are several reasons for this, some of them not so obvious.
If you are buying a home, it pays to speak to as many homeowners as possible. If you are looking for investment property, then you could try and talk with as many investment property owners as you can.
However, when asking for anyone’s opinion, there is one thing that you should be aware of.
As a matter of human nature, they will defend their own position. If someone does not own property, they will usually go to great lengths to justify their position and tell you why its such a bad idea.
Alternatively, a property owner will tell you why their property is in the best location, the best value for money etc.
Even qualified opinions must be looked at carefully.
15. Relying On Your Emotions
Controlling your emotions is easy to say but extremely difficult to do. The best investors are able to remove emotion from purchasing and selling decisions. In other words, it is less personal, and more about the intended and expected result.
If you are buying a home to live in, there is bound to be a great deal of emotion when you decide to leave the property. This is one of the reasons that agencies use to sell property. The people showing the prospective buyers see the property for what it is. The more you can focus on why its being sold, and what the money will be used for, the better.
If you own investment property, the trick is to stick to your plan (which is why a plan is so important). Once a property reaches a certain level, there will come a time when it makes more sense to sell it rather than keep it. It could be difficult if it happens to be the first investment property you purchased.
14. Buying an old property vs. a new property
Buying older property can be extremely profitable. Newer properties generally cost a little more, and many people prefer new properties. However, there is good and bad on both sides.
Older properties are generally cheaper, but you must make sure that you have enough cash to renovate. If you make the mistake of buying on older property without putting enough money aside to spend on renovation, you will have an empty apartment on your hands that will take a long time to fix up.
Newer properties require less renovation, but you pay a premium for the space and as a general rule the size of newer property is smaller.
The trick is to make sure you know which property best suits your plan and your budget before you buy it.
13. Being your own property expert
Seeking out and listening to qualified advice is one of the most valuable ways of spending your time as a property buyer.
You can test your plan on other homeowners and investors for their opinion, and whilst you may not agree with everything they say, you will be surprised at how many good points they make.
Another source of good information is from the media. There are some excellent books, and of course online articles about property purchase.
Nowadays you don’t have to be in the dark about any part of the process. Information is available quite literally at your fingertips.
As we pointed out in part 1 though, make sure that you are consulting with ‘qualified’ people. By qualified, we mean experienced. Theories are easy to come up with but, as the saying goes, experience is life’s best teacher.
Next Week: Four more common mistakes including finance mistakes, agents and tenants.
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