3 Big Mistakes a UK Property Investor Needs to Avoid

How is the way a UK property investor looks at a property different from that of a owner occupier?

When buying a home to live in the buyer will look at the home and judge how much they will be able to afford on a monthly mortgage payment.

They can sometimes see the flaws of the home as character and an opportunity to fix up the property as they see fit and they focus less on how much they can get out of the property and more on how comfortable and convenient the property will be to live in and perhaps bring up a family.

For property investors, the game of property buying is a little different. When choosing a property for investment purposes, the profit that can be made from that property is the number one factor, the rest is just details.

Property investing means finding the right property that will offer a positive bottom line to the investor. Whether the property is being purchased as a buy to let or with the intention of flipping it and selling straight on, there are 3 big mistakes that need to be avoided like the plague when choosing an investment property.

1. Paying too much. Property investing is different from buying a property to live in yourself, in that the amount you pay for the property will need to be less than the amount you can make from that property. For a UK property investor dealing in buy to lets, ideally the cost needs to be low enough so that the rent from the property will cover the mortgage and make the investor a bit of profit at the end of the month, as well as the property appreciating in value over time.
   
   For flipping properties, the property needs to offer the investor enough income potential to cover the original cost of the home and all renovations that need to take place to put the home or property back on the market and make money.



2. Buying a fixer upper. For those who flip properties, the fixer upper is the name of the game and they live for properties that are in a poor condition that they can fix up and sell straight on. But the property investor generally wants to buy a property and then let it out at a profit. This would mean putting money into the unit for renovations is just like giving away your profits.
   
   The least amount of renovation money possible needs to be spent on the property. A great scenario would be if all the property needed was a couple coats of paint and then to be put straight back onto the rental market. Therefore the UK property investor must avoid the fixer upper unless they can pull whatever money they use to fix up the property, straight back out or unless the work is essential to bring the property up to scratch.



3. Buying in crime ridden areas. Purchasing investment properties in crime ridden locations may seem like a good idea because you can sometimes buy the properties very cheaply, but if the property cannot be used for profit due to the conditions of the area, that deal may not be as good as it looks at first. Choosing an investment property takes research and that research includes making sure that property bought in that location have resell and buy to let potential.

A UK property investor will purchase properties for a variety of reasons. Whether the property is for a residential or commercial buy to let or some other business usage, these mistakes are the ones that can turn a good deal into a red line on the accounting sheet.

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