5 Massive Mistakes Property Investors Make
There are a number of common mistakes that new property investors can make, and these mistakes can end up costing them a lot of money in the long run. To help you avoid making these mistakes, we’ve compiled a list of the top five massive mistakes property investors make.
- Choosing an Agent Based on Cheap Fees – It’s easy to be attracted to an agent with lower fees, but keep in mind that you get what you pay for. Choosing an agent who charges lower fees may seem like a good idea, but they may not be providing the same level of service as other, more expensive agents. Before selecting an agent, consider their fees as an indication of their quality and the level of service they provide.
- Not Having Quality Landlord Protection Insurance – Having landlord insurance is essential for protecting your investment property against a wide range of risks, from damage caused by tenants to loss of rental income due to tenant hardship or death. It’s important to note that standard building insurance will not cover you for tenant-related matters, and you should avoid taking out inferior landlord insurance from financial institutions or supermarkets. Only agents can give you access to quality cover, so speak with them to find the best insurance for your investment property.
- Renting to Family and Friends – While it may seem like a good idea to rent to family and friends, it’s not a smart move when it comes to property investment. Renting to family and friends can lead to emotional involvement, which can result in financial loss. It’s best to keep your property investment strictly business and avoid renting to those close to you.
- Renting Property Privately – It’s tempting to rent your property privately to save on agent fees, but this can end up costing you more in the long run. Bad tenants often target private owners because they know they lack experience and may not have stringent checks on their tenancy application.
- Not Putting Money Back Into the Property – Investment properties need to be kept in good condition to attract and keep quality tenants. Neglecting maintenance can result in expensive repairs and can make it difficult to sell the property later on. It’s important to keep the property in good condition by investing in regular maintenance, such as repainting and replacing carpets.
Avoiding these five massive mistakes can help new property investors to make smart decisions and create long-term wealth. Remember, property investment is a long-term game, and taking the time to do things right upfront can save you a lot of money and heartache in the long run.