Investing in property is a big step, and we make no bones about it, as with all investments, there is a degree of risk (but in 40 plus years of experience, less of a risk than many other forms of investment).
Wherever you are on your property investment journey, it’s only natural, and actually healthy to have fears – can I afford it? What if the tenant doesn’t pay? What happens if there is a downturn in the economy? What if I buy in the wrong place?
What you need to do is to be aware of your fears and work out how to overcome them.
Here are some strategies to help you sleep at night:
One step at a time
First and foremost, take it one step at a time. Break down the property investment journey into little steps; plan where you want to be and what you’re aiming for then, do your research and talk to experienced people and financial specialists who can give advice specific to your situation.
Find a property, get the finance, sign on the dotted line. Employ a manager and find a tenant.
Yes, there appears to be a lot to investment property, but the reality is, once it’s broken down into smaller steps, the ladder is easier to climb.
Be flexible and be open to hidden opportunities
Investing in property does require a certain amount of flexibility and being prepared to act on opportunities that come your way.
For instance, if you are starting out on your property investment journey, you may have your heart set on one location or a particular type of property, but actually, you can get a larger property with better returns if you look at the next suburb along.
If you already own a property, while you are entitled to raise the rent at intervals, you may need to consider whether raising the rent will mean you’ll lose good tenants who are paying on time and looking after your property. It may be better to keep the rent at the same rate or asmaller increase instead of an empty property while you look for another tenant.
Prepare for the unexpected
Whatever the odds are, the worst case scenario may not actually happen, things do go wrong from time to time so prepare for it.
Take out a good landlord’s insurance. This will give you peace of mind you are covered for unexpected damage to the building plus many policies give cover for rental default and damage by the tenant.
Try to keep a bit of extra to one side and budget for if things go wrong; the plus is many of these, such as maintenance issues are tax deductible.
By monitoring and reviewing your finances and strategies regularly, you will not only feel as if you’re on top of things, but you may also be able to make some savings in your outgoing costs or increase your rental income.
Do some research or talk to a specialist to see if you can get a better deal on your finance. Look to see what simple renovations can be done to increase your rental return.
Keeping your property investor mind-set is imperative to success. Yes, you will encounter challenges, and yes, there will probably be times things don’t go according to plan, but deal with the issue and stay focused on the bigger picture and your goal in life.
Life is full of challenges so don’t give up at the first hurdle; face the challenge and deal with it, learn from it and move on.
We have helped hundreds of people overcome challenges and realise their dreams through property. Our experienced team can give you lots of information and tips to consider to help you make informed decisions about property investment.
Give us a call on 02 4954 8833, send us an email to email@example.com or pop into our Cardiff office for an informal chat.