Money

5 Greatest Concerns Keeping Property Investors Awake

Story Highlights

  • #1 - Buying the wrong property
  • #2 - Low rental demand
  • #3 - Not being able to afford the bond repayment
  • #4 - Not having enough time to find the right investment
  • #5 - Losing money on a bad investment

Property is still widely acknowledged as one of the most secure long-term investments anyone can make especially in the unstable economic climate of today.

Owning a home is like a ship anchored in the harbor when there is a really bad storm outside. However, this does not mean that property investors are completely worry-free.

There are many concerns regarding the purchasing and selling of properties and it is still causing major barriers to entry for many potential investors.

Here the top 5 concerns that keep investors awake at night:

#1 – Buying the wrong property

Buying the wrong property is not like buying the wrong dress – unfortunately, you cannot exchange it.

It is important that you consider the house as well as its neighborhood before purchase. A great deal means nothing in the wrong neighborhood.

This can easily be overcome by doing adequate research:

— Is there potential for growth in this house?

— Is it close to amenities in the area?

— Are there dramatic infrastructure plans in the pipeline for the area?

It is also important to consider the property’s effect on you, as a homeowner, after tax.

Something that is often overlooked by investors.

#2 – Low rental demand

You don’t want to spend your hard-earned money on a property just have it stand empty, which means that your return-on-investment (ROI) will be seriously hurt!

In order to reduce that risk, you can check online property portals that advertise rentals and see how many rental units are available in any particular area.

So, if there is an oversupply, it probably means that you will battle to find a tenant. However, buying in a more affordable area that offers ease of access to schools, malls, and public transport might improve the chances of you attracting the ideal tenant.

#3 – Not being able to afford the bond repayment

A major fear for new investors is purchasing a property that’s way over their budget and not being able to find a tenant in order to pay the bond repayment every month.

It is important that you organize your finances beforehand and ensure that you have an emergency fund on hand to cover the extra costs should the property remain vacant.

In other words, make sure that you buy a unit and offer an affordable rental amount. If you purchase a unit that is too expensive, and you’re looking to adjust your return by increasing the rent more than you should, you will scare away potential tenants.

#4 – Not having enough time to find the right investment

Even though investing is a good idea, who actually has time to research and identify smart investments?

It is easy for our everyday lives to get in between the time we want to spend on our property portfolio especially if you have a family and a full-time job.

And to make matters worse, everyone you speak to seems to think they are experts in the field, so who do you actually trust?

It would be a good idea to align yourself with trusted advisors and people who have actually established an impressive real estate portfolio. This way you can learn from their mistakes and avoid them in future.

#5 – Losing money on a bad investment

In the end, there are no guarantees when it comes to investing, but if you do enough research and ensure that you have made a wise investment, you should not lose your money.

Property is a long-term investment, which is exactly why investors should practice the art of patience before they decide to take the plunge.

The chances are slim that you will reap the rewards within the first few months or even years, but if you keep up with the maintenance of the property, its value will rise over time!

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Xavier De Buck

Real Estate Agent Keller Williams Realty | Social Media Junkie | Content Curator | Early Adopter | Proud Husband & Father

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