My property investment career started off pretty rocky. The first Buy To Let (B2L) property I purchased was a very emotional decision and therefore was a bad investment with very low returns. The tenant was very demanding and wanted everything doing yesterday, he was very unreasonable and communication broke down within a few months between him and my letting agent.
However I made the best of it, and after 2 years, I served my tenant with a section 21, then made significant improvements and listed it on the market for sale.
Although, it all turned out OK in the end, I had many dark nights of the soul, beating myself up for being such an emotional fool when buying the property. But thanks to the turbulent ride I had with my first rental, I immersed myself into ALL things Buy to Let. From reading books, visiting online forums, going on courses, watching TV shows, listening to podcasts, simply anything I could get my hands on.
My Top 5 Things I Wish I Knew Before I Started Investing In Property are:
Don’t rely on anyone to make your investing decisions for you.
If you don’t fully understand something then do not invest. Wait until you are clear.
There are plenty of “sharks” waiting to snatch your money out of your hands and into their bank account. I have had over £8,000 “stolen” from me. It was more money, but by blood sweat, tears and sleepless nights I managed to claw some of it back. However the two companies involved have stop returning any communication and they have liquidated one of the companies and set up an exact same company offering the exact same services just with a different name. They have been very clever.
Check out my blog post on “property mentoring companies and buy to let specialist”.
The value of research.
I can’t stress enough how important research is. You must research the hell out of the property investment game – learn, understand and master the fundamentals. Research the area you chose to invest in. What does that area demand? Can you meet those requirements?
Understand how the 80/20 rule applies to investing.
It’s 80% mindset and only 20% action. Mindset is probably more important than anything you will ever do when becoming an investor. If you haven’t got control of your mind you may skip vital steps and make poor investments. You will save so much time and energy, if you apply this rule to your investing business plan …
Complete a business plan.
Before you invest £1.00 in an investment – especially property investment, I advise you complete a business plan.
It will make stacking your properties 100% easier and reduce any potential stress. If you don’t know what type of properties you would like to invest in and how much must (pretax) profit you would like to earn per month, you may end up investing in the complete wrong property and stuck with a poor yielding property for years (unless you are lucky enough to sell it for a profit) – this is part of the 20 in the 80/20 rule. May seem unimportant but long term this is VERY important and necessary. If you find yourself, reluctant to do this and find it unnecessary, why? Why do you want to skip steps and rush into poor investment decisions.
Have an exit plan included in your investment strategy.
You don’t want to be stuck with a property that you can’t sell and making a low return if you rent it out. Remember interest rates will eventually increase so when you are stacking your properties ensure you will make enough profit to cover any inevitable increases along with any maintenance issues in the property. You don’t want to be in minus figures and making a loss. You may as well keep your money in the bank earning a pitiful 1.5% interest per year.
I hope you have found this post helpful.
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