The property market is a lucrative place. Entrepreneurs have flooded to real estate investment for decades, and with good reason. Although the market fluctuates, savvy investors can make money whatever the state of the economy.
There are so many routes to take with real estate, there is always a dime to be made! Whether you buy to rent, refurbish and resell or simply ride the property market to the top, there’s big money here.
Of course, for every success story, there are a handful of disasters. The property market is not without its risks. The market can turn, and if you’re not prepared, it can leave you bankrupt. Any entrepreneurial mistake can be costly. But, real estate involves a lot of money and we know investors who have lost their life savings. Today we’re going to share their mistakes with you. Learn from them and avoid similar tactics! Take our advice, and you’ll be well on your way to property entrepreneurship.
Mistake number 1: The wrong location
In the real estate market, investors live by one rule: location, location, location. You’ll have heard this old adage a hundred time, but it always rings true. The location of your property will make or break your investment. Particularly in city areas, different districts fluctuate in value. The trick is to buy early in up and coming locations. Look for planned transport links or potential regeneration projects. Catch it while prices are low and as the location blossoms, so will your house price. Avoid districts in decline!
Mistake number 2: Paying too much to buy
We’ve kept our eye on property investors for years and we’ve noticed one key thing. The best investors always buy at the lowest possible price. One of the biggest mistakes is overpaying up front. A lot of investors assume they’ll make the money back on the sale, but this is a dangerous game to play. Make your money when you buy, not when you sell. Always push for the lowest price and walk away if it’s not right.
Mistake number 3: Failing to cover yourself
There are all manner of risks involved with real estate investment. One of the popular options is buying to rent. You take in tenants which produces a steady stream of income. It’s a great plan, but requires a lot of additional thought. First of all, you need to cover yourself with landlord insurance. Start by finding more information at http://www.uklandlordinsurance.com/. When you have tenants in place, you can never be too careful with your own property.
Mistake number 4: Underestimating expenses
We often see real estate investors focusing solely on the house prices. They balance profit margins based on sale prices alone. This is a huge mistake. There are countless expenses involved in buying, renting and refurbishing. Each must be taken into account. The best landlords, for example, set aside half their rental income for expenses. That’s a huge amount! When you consider agency fees, maintenance and damages, it starts to make a lot of sense.
There is a fortune to be made in the property market. Savvy investors can turn a profit in any economic environment. However, there are some big pitfalls to avoid. Follow the advice here and you’ll be well on your way to a real estate fortune!