Firstly before I give some of the insights into mistakes often made, please understand these can be avoided and property is a fantastic way to make money and know financial relief, financial independence and even financial freedom. I want you to know what to do but also what NOT to do. Learning from other people’s mistakes when buying rental property will not only help you avoid them, but it will also help better prepare yourself for what to expect throughout the buying or acquiring process. Avoiding these common mistakes could save you thousands of pounds and increase the likelihood that your property investment business will succeed and produce the cash flow you want.
Buying property that doesn’t cash flow
Always buy for cash flow. Let this make a difference to today and if in a few years time there is equity in the asset that is a bonus.
Not having a buffa for maintenance and voids
Always have a cash buffa for the unexpected and those voids (that you shouldn’t ever have if you’ve bought/acquired in the right area).
Incorrect insurance cover
Don’t get the cheapest, just get the correct insurance for your property and ensure the insurance company know the tenant types and the strategy you are using to generate income.
Investing purely for potential appreciation
This is not savvy and is not at all conducive to changing your financial situation now – AND you do not know whether it will appreciate. Plus we are not promised tomorrow so lets make a difference today.
Making emotional driven decisions
I love property, I love beautiful property but I have had to learn to detach my head from my heart. Since I’ve done that I have found the ugliest of properties to make great profits. Decisions need to be made based on area, strategy and numbers. Don’t ever make decisions based on emotion, this is a business, make sure you treat it as such.
Doing Everything yourself
This will potentially exhaust you. It is not worth trying to save money by doing everything yourself, it is more likely to lose you money in the end. We are not skilled at everything, so be kind to yourself and your business.
Not having enough leads in your funnel
This is something I cannot emphasis enough. Enough leads in your funnel is crucial to hitting your target (unless of course you only want one property). You will hit brick walls and potentially deem yourself hopeless if you don’t have quantity of leads and potential deals because if the only 2 you have both fall out of bed, you have to start all over again. We know 1 in 3 fall out of bed and that’s assuming a straight forward sale, with other strategies you could be looking at 1 in 10, so please don’t underestimate the need to have quantity of leads.
Not having the right people
Property starts with people, with relationships, with rapport, with trust and integrity. Take time to pick wisely when working with other people, when creating power teams. Make sure you put people around you that do you good and not harm.
In the world of business and in this instance property ask for help, don’t rush into deals or rush the process, never cut corners, gain clarity at every point, take one step at a time and never be pressured, do your due diligence, understand the art of Risk Analysis and know that the ’set up’ of any property strategy will determine whether you end up with passive income or a lot more work. Property is not complicating, don’t allow others or yourself to convince yourself otherwise. It is an incredible commodity and mistakes will be made, but lets avoid those we can by doing things the best way, the right way, not necessarily the fast way.
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