Property Investing – The 7 Biggest Mistakes Made by Property Investors
In theory buying property is not a difficult process, although it can be a bit stressful, admittedly. Buying Investment property, buying it regularly and buying well as a business CAN be difficult however.
Buying property is easy. Well, it can be a bit stressful admittedly, but its essentially not a difficult process in theory. Buying Investment property, buying it regularly and buying well as a business CAN be difficult however. Here are the 7 biggest mistakes investors make and ones that you should avoid at all costs:
1. No Strategy
Having your strategy prepared is not a luxury step that can be skipped or done later on. If you haven’t finalised your strategy then you really need to do this first because it is pivotal to everything - from what you put on your business cards to how you organise your time, to whom you should be networking with. Then your next priority should be to look at your strategy and write an action plan of how you are going to implement it.
2. Analysis Paralysis
Simply spend too long analysing deals and being too afraid to dip their toes in the water. Sometimes this is because of an inherent underlying confidence issue but sometimes it is just that property is the wrong investment vehicle for their risk profile. It’s action that propels you forward and you will probably learn more from the mistakes you make than what you do right!
3. Do Not Keep to Their Strategy
Having and keeping to a defined strategy can avoid wasted time, energy and money. If you don’t follow your strategy you can be easily tempted to pursue a really good sounding deal – and it may in fact genuinely be a really good deal. But the key question is whether it is a good deal for YOU? The wrong deal WILL cause you problems. Your strategy acts as a point of reference to keep you on track in everything you do – ask ‘is this deal/action/time spent in line with my strategy?’
4. Want To Make A Quick Buck
Property Investment is generally more of a long-term investment and whilst it is possible to make a quick buck with luck and the right contacts and strategy, it is the exception rather than the rule.
5. Focus on being busy instead of doing deals
All too often I hear of investors who ‘busy themselves’ with all sorts of ‘activity’ to get their business started. But that’s all it is – busy-ness for the sake of making them feel like they have moved forward and taken action. The truth is investors do these things from the off because they are EASIER than starting to get out there and look at deals and talk to vendors etc.
I would argue that until you know you have a viable business, you simply don’t need to appoint an accountant, decide on the company formation or set up bank accounts. Do your first deal or 2 and then decide if the business is for you and how you are going to work it.
6. Spend forever on ‘getting marketing in place’ instead of getting started
I’ve seen too many new investors get bogged down in at the start. They spend literally months designing and printing leaflets, sourcing leaflet droppers, pricing up classified adverts and trudging through estate agents doors. This is all fantastic and necessary to build your business. But it should also be balanced with taking action to get straight on with learning the nuts and bolts of the actual hub of the business – assessing leads and turning them into deals. The amazing thing is that months of marketing activity is all geared to finding a motivated seller – yet you CAN do this from day one and what’s more you can CHOOSE which motivated sellers to deal with rather than whatever lands on your desk – its called ‘buying leads’
7. Give Up
Like anything in life, buying property for profit takes work and effort. You were probably in the wrong place in the first place, but if you truly believe that property is the vehicle for you then identify where the blockage was and see if you can outsource the part(s) of the process to others or find a joint venture partner to work with.
(c) 2008 John Rattigan
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ABOUT THE AUTHOR
John Rattigan, a successful property investor, is the owner of The Property Investor PA, a dedicated UK support service for Below Market Value Investors. Get John's free 5-day mini ecourse "5 Simple Steps To BMV Property Success" at http://www.thepropertyinvestorpa.com/freebrochure.html