By Lena Guirguis
Even seasoned investors make small oversights that could cost huge in the end. Lena Guirguis
outline the five common mistakes most landlords make.
- Rushing to purchase.
New investors tend to want to get that first deal under their belt in a short period of time. Why is rushing into a purchase so detrimental to your long-term success?
- You will categorize a cheap property for a good deal. There are many properties that are priced below market, and bring in huge returns. However, what you see on paper and in reality can be two different things. Take the time to confirm what reality actually is.
- You trust the Realtor or seller’s information as fact. The Realtor only has access to the information provided by their clients, and if the seller is in a tough situation they may massage the facts to highlight the positives of the property. You need to take the time to do your due diligence and confirm facts for yourself.
- You bite off more than you can chew. Complete one project before jumping into the next, and if you want to run parallel projects, ensure you have a team you can trust and a slush fund.
- Not understanding the market.
When buying a property, you need to look at all the factors within that market that impact you and your new purchase. This goes beyond the basics of population, job growth and economic fundamentals.
Things to consider:
- Types of units required in the area. If the area is desperate for two and three-bed homes, target that property type.
- School zones and boundaries. Understand where the most desirable schools are and what the boundary lines for enrolment are. You don’t want to buy a property that falls one block away from the desired zone your future tenants want to be in.
- Preferences for layout and style. We need to educate ourselves and understand what our future end user wants.
- Underestimating the importance of property management.
If you have the right manager in place, the small oversights can be managed to ensure minimal loss over the years. This is not just about hiring a property manager. You need to know the day-to-day management before you close a deal.
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