If you are planning on purchasing a property in order to make a return, there are pitfalls that you need to make sure to avoid.
- Don’t let your heart cloud your judgement – when looking for a home, it is so easy to become overwhelmed with emotions. You may have found a dream property but is it best for the financial gain you were originally looking for? If you are going to be looking for future tenants and renters, there are other factors, like location or functionality for example, that need to be factored in.
- Remember to be patient – property investment won’t make you an overnight millionaire. With careful planning and setting goals, you can monitor your achievements little by little.
- Be informed – do some research on the market and surrounding areas of your investment, and then take it a step further. Being an expert on the neighborhood and surrounding areas doesn’t give you a financial advantage. Being well researched in the financial fundamentals to property investing is just as important.
- Actually figure out the numbers – how much will the mortgage be? Taxes? Utilities? Repairs? Is this something you would cover in the rental cost? By laying out all the expenses it takes to run this investment property, you can properly analyze how to make it into a positive cash flow.
- You are going to be a landlord – don’t forget about the part where you will have to take care of any repairs and to fix any issues that may arise in a timely manner. This is a second full-time job in that you need to be prepared to accommodate to the satisfaction of tenants at any given time. That also means checking up on them as well, to be sure things are being treated properly and payments are coming in on time.