If you decide to choose to rent property, you have to master the process of picking the right investment. These are five mistakes to avoid at all cost
Praven Subbramoney, CEO of Private Bank Lending advises the five mistakes to avoid when choosing the right rental property:
Your emotions – try and avoid falling in love with the property. Rather weigh its potential to attract quality tenants. Don’t look for features that appeal to you, but the market you are targeting.
Hasty decisions – talk to different property agents and view a minimum of five properties or units in the area before making your final decision – unless you are taking advantage of a good deal. Also, let the agents know that you are buying an investment property and will be exploring a few options. This will help you make an informed decision and also negotiate a good price.
Cost of maintenance – before buying your investment property, it is essential to establish the type of maintenance required. The idea with this property investment strategy is to make as much money as possible from the rental income while avoiding ongoing expenses such as outsourcing maintenance.
Investigate rental yield – don’t just take the agents’ word about how much tenants are likely to pay for rent. Do your own research and find out how much other properties in the area are being rented out for. In this case, you risk ending up with a low rental yield and low capital growth property, which will cost you as you may have to re-sell it.
Talk to experts – don’t be reluctant to share ideas and seek advice from experienced property investors. If possible, also join credible property investment groups. Taking advantage of advice and learning from the mistakes of experienced investors will go a long way in helping you to succeed.