-Property Investment Mistakes…

Investing in Durbanville Property – avoid these seven costly mistakes:

Property investing in Durbanville, as in any area, can be a daunting and risky business; however, it can provide a financially abundant future for those who master it.
Seasoned property investors generally have a good understanding of the industry and the pitfalls involved in this kind of business, allowing them to take full advantage of the lucrative opportunities that come their way. However, novice investors may struggle a bit as they try to navigate through the sometimes complicated world of real estate investing.
The best way to learn about investing in property is through experience, but this can often lead to costly trial-and-error-type education. Making mistakes in this industry can cost you dearly. As such, it is preferable to learn from the mistakes of others.

Here are my seven deadly sins to avoid at all costs when investing in property:

1) Don’t be in a hurry: Allow enough time … Time allows you to do thorough research, and in property, knowledge is power. Don’t simply buy the first deal you find, as it may not be the best deal out there. Compare properties in the area and see what else is on the market. Evaluate the price of the property in comparison to its value, look at the resale value and general rental income of the properties in the area. Get a feel of where the area is headed and work out what you can spend on the property before you commit to a purchase. Using a reputable estate agent in Durbanville, you can get to view various properties on the market in order to compare them.

2) Don’t go it alone: If you are starting out it is wise to enlist the help of an experienced property investor to help you with deals. A good Durbanville estate agent could also give you valuable advice if they have your interests at heart. This takes some of the self doubt out of the equation, as you will have an experienced individual helping you with the analysis of whether it is a good investment or not. Take time to inform your estate agent of your needs, and make sure you trust their objectiveness and expertise in the Durbanville market.

3) Finances and debt: Not keeping a tight grip on finances is one of the worst mistakes you can make. Potential investors need to do a cash flow analysis to determine their true financial position. You cannot manage if you do not measure. Therefore always do a complete personal cash flow statement of your financial position. These are critical tools as you grow your portfolio, and they show you where hidden savings can be made. Also bear in mind that interest rates may increase in the future.
It is also important to shop around and get the best financing deals you can. A loan is almost never absent in any property acquisition, and most investors look into some financing options before buying a property. Loans inevitably increase the cost of acquiring the property and can have a serious negative impact on the profitability of your investment. As such, it’s essential that you shop around among lenders for the best possible deal.

4) An unbalanced portfolio: Everybody knows the saying, ‘Don’t put all your eggs into one basket’ and this is especially imperative when investing in property. Always diversify in order to minimise your exposure to risk. In other words, don’t buy all your investment properties in one development or in one area. Ideally, the aim is to broaden your portfolio to include different kinds of properties in different areas.

5) Property mismanagement: Keeping your properties in good order and maintaining them correctly is a vital part to any sound investment portfolio. Always put aside a certain portion of the revenue a property generates for its upkeep. Also, if you do not have the time or capacity to properly manage the property, consider hiring a professional to do it for you. Another key secret in property investment is to reward tenants that take good care of your property – not only will this encourage the tenants to rent from you for longer, but it will also save you money on maintenance costs in the long run.

6) Don’t assume structural integrity: If in any doubt, it is always a good idea to hire a professional home inspector to take a look at the property in question. When investing in a property, inspections are a normal part of any due diligence process. The home inspector can find structural problems that nobody else knows about, and this can save you a lot of money down the line. My best advice is to trust, but verify – make sure you get a full report from an independent inspector, and that you question anything you are not sure about.

7) Location, location, location: The truth is, a property in a bad location will not fetch you a good price when you sell, even if the market is bullish. Therefore, it is essential that you select the location of your properties very carefully. Locations close to areas with high employment opportunities, low rental vacancy rates and with very strong infrastructure, including transport, schools and shopping centres, are best. The focus should be on capital growth first and rental income second. A property in a good location, such as Durbanville, will most likely offer strong capital growth and this is what will truly build your wealth.