Deciding to enter into the rental market is a brave one. You are going to plunge a large amount of money into an investment, which you are then going to lease out to complete strangers– on the surface, the whole idea can sound rather ludicrous.
In reality, of course, life as a landlord is a viable choice for business and financial success. Rental rates are high, which means that if you find a good property, then you could be on your way to financial security. However, it’s often the “finding a property” part that proves to be the most difficult– because first-time landlords are always liable to making a number of newbie mistakes…
#1 – Choosing a house for themselves, not their prospective tenants
It’s inevitable when buying a property that people start to think about what they would like. They don’t see properties through business eyes on their first purchase; they see properties as they would as a homebuyer, as that’s where their personal experience lies.
As a result, they decide to purchase a property that isn’t specifically targeted at any one section of the rental market, a property that would be nice to live in but just isn’t a viable investment.
#2 – They refuse advice
There are various sources of advice during the property investment buying process; surveyors, real estate agents, even experienced landlords on internet forums. However, many first-time prospective landlords have a tendency to try and break the mold, do things differently, and refuse to follow generally accepted wisdom.
Maybe, one time in a thousand, someone ‘doing something different’ is actually beneficial– but for the most part, advice is something that has to be soaked up like a sponge in the real estate business. By choosing to ignore the wisdom offered from various sources, first-time landlords can find themselves the victims of hubris, and make an expensive mistake as a result.
#3 – Buying a property just for the sake of buying it
If someone has made the decision to become a landlord, then they may feel they want to get started as soon as possible. That means they are liable to jump into the first deal that sounds remotely workable to them, buying a property not because it’s absolutely the right choice, but because it’s available, they can afford it, and they decide they might as well go for it.
The danger of this is clear; a property bought just for the sake of it is not a wise investment. New landlords can land themselves in hot water if their snap-decision property turns out to need more work than they expected, or is located in an area that no one wants to rent from. By fast-forwarding the process, they miss crucial signs that suggest a property is not actually a viable choice, and often have to spend a fortune rectifying the mistake.
Now that you know what the most common new landlord mistakes are, you can avoid them, and ensure you select a property that is genuinely viable as a rental investment. If you get your property right, then the sky is the limit for how far your property portfolio aspirations can go.