For those who are relatively inexperienced the prospect of buying an investment property can seem daunting. In fact many new investors may feel overwhelmed at first.
I guess one of the reasons for this is that property is an all or nothing thing. Unless you buy shares in a property company, or join a part ownership scheme, there is no middle ground. You either buy a property or you don’t. You can’t try buying a bit of a property and seeing how it feels. If that feels ok and works well, then you can buy a little bit more and gradually build up to owning the whole property outright. No, on day one you either go for it or you don’t. There are no half measures.
In relative, as well as in absolute, terms this means putting down large sums of money. It doesn’t really make any difference that for most of us this will be mainly, or solely, someone else’s money. If it all goes horribly wrong the bank, or whoever you have borrowed from, are unlikely to cut you any slack.
To many new investors, thoughts like this highlight the risks inherent in property investing, but it’s easy to let thoughts like that become disproportionately influential on whether you take action or not. It is true that there’s no such thing as a risk free investment or a risk free business, but if an investor follows the right processes and checks, in other words undertakes full and thorough research, analysis and due diligence prior to purchase, much of the “risk” can be eradicated. And those risks that can’t be eradicated can be reduced.
Even so, in my experience many investors are still, to some extent, held back by fear. Whilst the positive of this is that it can stop them being reckless, the negative is of course that they can be overcautious.
I believe that to succeed in property investing it’s better to do something rather than nothing. Of course, I don’t mean having a reckless disregard or to jump in without exercising our common sense. But through what I consider to be the common sense actions and preparation one needs to undertake before launching into buying one’s properties, hopefully we will avoid many of the mistakes I’ve seen new investors, and even some experienced investors, making. And we will have eliminated much of the risk that is perceived to go with property investing.
Here’s to successful property investing.
Peter Jones B.Sc FRICS
Chartered Surveyor, Author & Property Investor