“Investing in property is a great way to build wealth and financial security for the future, but it’s not without its pitfalls”. Words by says Sidd Mahajan London successful and renowned property owner at Tulips Real Estate. As with most things in life, though, a little knowledge goes a long way. Being aware of just a few simple rules can put you ahead of the vast majority of property investors.
As per Sidd Mahajan London and his years of experience in properties, investment, and real estate. List below are 10 do’s and don’ts all property investors should consider before they dive headlong into property investing.
Let’s start off with the do’s!
- Get your personal finances sorted first – While investing in property is indeed one of the finest ways to safeguard your financial future, you must already have a solid base to work from if you want to get ahead in the investment game.
- Make a plan – If your personal finances are in reasonable shape, then the next thing you’ll need to do is make a plan. This doesn’t have to be as formal as, say, a business plan (you may even keep it to yourself, never to be seen by another’s eyes), but you do need to get a few things down on paper before you even begin looking at potential property purchases. Think about things like your budget, how risk-averse you are, what you want from your investment, where you see yourself in five, 10, even 25 years time, and what area of property investment you’d like to get into.
- Be realistic with time frames – It’s important to remember that property works in a very different way to other investment markets and that you need to adjust your expectations accordingly, especially when it comes to time frames. Investing in property is great if you’re in it for the long haul, but for short-term investors, not so much. Property is steady, so be prepared to ride out dips and even crashes.
- Your homework – Failing to study your investment is probably one of the biggest avoidable mistakes you can make. Read books on the investment type, study the wider property market, drill down on the local area and property type. Basically, find out all that you can while it is cheap to do so.
- Ask questions and seek advice – What you can’t find out, you can ask…and you shouldn’t be afraid to do so. Seek out experts and ask for their advice. Most will be thrilled to be seen in that light and only too happy to help; they all started somewhere, after all.
- Use only fully accredited agents – Always, always, always check that the letting agent you choose to deal with. He should have the necessary credentials and accreditation behind them before instructing them to handle your investment. It’s of paramount importance.
Don’ts – Sidd Mahajan London!
- Be hasty – Jumping in too fast has been the undoing of many an investor, so don’t do it. Take a deep breath and think before you act; it could save you a lot of time and money if you do. Obviously, if after conducting the necessary due diligence all seems well, go for it. We don’t want you to miss out on an opportunity of a lifetime because of dilly-dallying. You do need to think clearly and thoroughly before you act in this arena.
- Buy without viewing – Siddharth Mahajan says – Some people still buy an investment property without ever setting foot inside it. As mentioned in our list of ‘Dos”, make sure you do your homework, and that means getting out there to view the property AND the local area.
- Underestimate your total cost of living – It’s important to remember your investment is all about the bottom line; nothing more, nothing less. Failing to recognize this is a sure path to losing money. Take into account everything before you invest. Look at the OVERALL cost, not just the purchase price, and take into consideration any overheads you may incur along the way.
- Be cheap – When presented with two properties, one selling for £150,000 and the other for £500,000, many will consider the first property to be the better investment, based on nothing more than the fact that it costs less than the second property. Naturally, this is no way to enter into an investment. Make sure to do your homework and then come to a final decision, looking at all other aspects and not just the cost of the property.
Also Read – Tips by Siddharth Mahajan: How to sell luxury homes in London?