Property investment takes time, effort and a good deal of resilience. From my experience, I have learnt that good judgement must be honed and developed, and any would-be investor is bound to make mistakes. This is particularly true when investing in your first property. There are, however, several things that investors can do to avoid common mistakes as you invest in your first property.
Bad investment decisions often occur because the requisite research has not been conducted. Any first-time buyer should do their research beforehand to understand the buildings location and potential.
Read the property pages, go on house viewings in different areas and look at different property types to compare what you get for your money. Building an understanding of the types of property available and the typical residents will give you a better chance of succeeding when targeting your first investment.
First-time buyers in London, for instance, should always look to cast their net outside expensive central areas. This might mean looking at properties in commuter belts, or places that are likely to expand quickly. Understanding transport link expansions is an incredibly useful way of working out whether an investment will appreciate over time. Properties along the proposed new Crossrail line in London, for instance, are likely to see a good appreciation of value over time.
First-time buyers can be caught out by experience. One of the best ways to protect against this is seeking the advice. This is particularly true when it comes to money. Always get the advice of a professional accountant before making an investment to ensure that you are not caught out by cash flow problems.
Any would-be buyer should also ensure that costs are kept to a minimum. Starting small, investing in an affordable property or looking to buy with a partner are all great ways of doing this. But investors should be confident any investment relationship is a strong and long-lasting with appropriate contractual guarantees that avoids any ambiguity in the partnership should problems occur down the line.
Finally, investing in a first property should be, first and foremost, a business decision. Make sure you have done the maths before you invest. Buying your first property should be a rewarding experience. However, this emotional instinct can sometimes cloud investors’ judgements. Therefore, a buyer should always look to invest smartly in a property that is likely to attract strong and reliable tenants while also delivering a good long-term return on investment.