What’s the difference between a first-time investor and a seasoned expert? Let’s take a look at a few common mistakes first-timers make and how to avoid them.
Getting your finances sorted before you make an offer is critical. Experienced investors know their limits and don’t go over them. Getting the wrong mortgage can be a lifetime mistake if you choose the wrong option. An EasyPlan expert can help you avoid any pitfalls, but make sure you get help before you sign anything.
Beginners: Have a rough idea of their finances, then offer, then organise their finance’s.
Experts: Get pre-approved finance and only look for things in their budget.
There are plenty of people making money on the property market. A lot of them at someone else’s expense. Don’t be that someone else, do your research.
Beginners: Seek help from a friend, check a few things and figure everything else out on the fly.
Experts: Get a recommendation, research, research, research and checks with their accountant and financial planners.
Managing your cashflow
Shock horror – banks will lend you more money than you’re able to actually repay. Know what you’re able to repay, and realise that financial circumstances change
Beginners: Have enough money month to month, spend money while maintaining a short buffer.
Experts: Have a cash buffer, income protection insurance, building and contents insurance and landlord insurance.
Property is a long term game. There will be ebbs and flows to the property market and your investment where your growth may be stagnant or even go backwards.
Beginners: Gets nervous when there is a bad month or two and looks to sell.
Experts: Has money set aside if things go awry. Ready to wait out the bad periods.
Selecting a Location
Location, location, location. Perhaps the three most annoying words any potential investor can ever hear. The cliché is used for a reason, however, as it’s one of the most important factors for investment.
Things to look out for are proximity to school, public transport, shops and parks. Investigate into any planned developments that may affect the previous factors, or that may affect the roads, noise, etc. Even the crime rate can affect the growth of the investment.
Beginners: Buy somewhere close by so they can keep an eye on things.
Experts: Looks all around the country. Property managers can look after the investment.