Welcome back to my blog. This is the go-to place for entrepreneurs looking to amplify their income and their impact.
Today we’re going to be talking about property investing and specifically the top mistakes that you might be making if you’re investing in property for the first time. If you want to increase your income by investing in property then this blog post is perfect for you. So if that sounds good to you then let’s get straight to it.
1. DON’T LISTEN TO MONEY GURU’S
The first mistake to avoid when you’re investing in property is listening to the no money down gurus, the ones that are like: ‘’you can buy a house with no money’’ because the reality is there are a lot of property trainers out there who are teaching these methods that don’t actually really work in real life.They are actually making more money from training than they are from actually investing in property.
There are a lot of things that are wrong with that but the main thing is that they’re setting these false expectations for newbie property investors like yourself really high. Actually buying a house with no money is relatively unattainable for most people that are just starting out investing in property. Now i’m not saying it’s impossible, I’ve done it and I know people that have done it too.
But the reality is that if you’re just starting out then pursuing a more simple strategy is going to get you to your goals of investing in property a lot faster.
If you are looking to buy a house with no money and all that jazz you really have to build relationships with vendors so if you are the average Joe who’s looking to invest in property in the uk you likely have a job and you don’t have limitless time then this strategy really is not going to work for you.
So just take what the property gurus say with a pinch of salt i’m not saying it’s never going to happen but just think about it critically. For example right now the market is way too hot for really anybody other than experienced property investors to be finding no-money down-deals.
2. EDUCATE YOURSELF
Moving on to the next mistake to avoid if you’re investing in property for the first time and that mistake is jumping in without educating yourself at all.
Property is expensive and specifically making mistakes in property is really expensive so you can’t just jump in without educating yourself.
There are a lot of people who claim that property does not work, that it is risky, or that it is expensive simply because they have jumped in without knowing what they’re doing. Don’t be one of those people who watch one episode of Homes Under the Hammer, or hear about their friend making a hundred grand from property, and then decide to get into it.
You need to educate yourself first, now unfortunately the property training industry is a bit of a weird place. I’m not gonna lie there’s a lot of scammers and property gurus that don’t actually know what they’re doing. It’s a little bit of a mine field but these are my main tips for finding a place to educate yourself if you are just starting out and you think property
investing is something that you want to do.
But if you’re not sure then just start reading around the subject.
I would really suggest these resources so:
- The Inside Property Investing podcast with Michael and Victoria who are absolutely great;
- Ted Talks podcast;
- The Property podcast by Robin and Rob
I binged on these three podcasts when I first started investing in property and all of this knowledge is available to you for free. Another resource I would recommend is Property Investment for Beginners. It’s this book here and this is a really good non-biased guide on all of the different property strategies without the author necessarily trying to sell you something which happens in most cases.
When you have exhausted the free resources then I would recommend joining a network or a subscription service like Prosperity Network because this is going to allow you to meet other people that are investing in property and build those relationships that are really important.
When it comes to investing in something more expensive like a mentorship or a course, I would only do so after doing my due diligence and asking someone who’s in this industry or who invests in property to tell me which training companies provide good training.
Now before i move on to the next tip if you want to learn more about creating a business that generates income and cash flow so that you can invest it in property then make sure you click the link in the description box because i have a free guide for you that dives deeper into hitting your first 10k of income in your business this guide will walk you through step by step how you can generate this income from social media so that you can then start investing in property. So make sure you click the link in the description box below.
3. SET REALISTIC EXPECTATIONS
The next mistake to avoid when it comes to investing in property for the first time is thinking that you’ll become a property millionaire literally overnight. You’re going to find out
sooner rather than later that property is a really slow game so what does this mean for you? It means you need to have some form of income coming in so that you can absorb all of the expenses that come with investing in property and there are a lot of them.
This is a mistake I made. I just jumped in head first and didn’t really have a financial buffer and all that meant is that it just made the whole thing even slower. So make it easier for yourself whatever you’re doing, stay in your job or take on a part-time job just while you’re making that transition. It’s gonna make life a lot easier.
Especially when you’re obtaining a mortgage even if you’ve already found your first investment property you’ve faced an offer and it’s been accepted just through conveyancing so actually legally owning, becoming the owner of that property and then doing the refurbishment.
Every stage of the property investment process is slow. Especially when you’re a beginner and you don’t have the team and the systems around you to make it faster. So even if your ultimate goal is to use property investing as a way to replace your income and to become financially independent that’s all great but it’s not going to happen immediately and it’s not going to happen overnight.
So make sure that you have a plan to actually have income while you’re building that property portfolio.
4. MAKE A PLAN AND STICK TO IT
The next mistake to avoid when you’re a newbie property investor is going in without a plan. I don’t know about you but when I learn about a new business or a new idea or a new concept I’m like a kid in a sweet shop and I just want to know all of the strategies and learn about all of the things.
If you’re anything like me then you’ll definitely find this in property just because there are so many different strategies
there’s your vanilla vitalettes there’s hmos there’s serviced accommodation or Airbnb, rent-to-rent, commercial to residential conversions, development and tons of other more complex strategies.
The key when you’re starting out is to go in with a plan and not to get distracted by all of these shiny pennies and it’s actually really straightforward. You just have to work backwards because your goals will determine what type of strategy you should be pursuing in property.
So let’s just say you want to be making £2000 from your property investments per month. That is your monthly number, that is the income that you want to hit to become financially independent or financially free and you just work backwards from that.
If in your area a buy to let investment will net you so not gross but net profit will net you £200 a month then that means that you would need to acquire 10 properties 10 biter lets to hit your income goal of £2000 per month and that’s exactly how you work backwards. A mistake that I made and that a lot of people make is that they get side tracked by all of the other sexy strategies in property when in reality you getting this shiny penny syndrome is just going to slow you down and it’s just going to take you longer to hit that income goal.
So Danny Inman who’s actually a really successful and well-known property developer in the uk created this diagram here and it basically shows how you can progress through the strategies as you become more experienced so you start off down at the bottom with the baby buy-to-let and then as you get more experience you can move up to the more advanced strategies.
I definitely suggest making your first property investment a buy -to-let just because it’s the most relatively straightforward one.
You’ll learn so much going through that process and then you can progress to the more advanced strategies. Looking at this it’s really the strategy that involves the least risk so there’s less likelihood of something going wrong on your first investment and putting you off completely. So once you have that plan and you know what strategy you need to do to get there then just be super laser focused on the outcome.
Don’t get distracted by anything else and you will hit that goal in no time and remember a lot of the most successful entrepreneurs or investors have something that works. They have a cookie cutter approach and they just rinse and repeat and that’s how they become successful.
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