And what you shouldn't...
- Don’t try to manage your property on your own if buying far away. If the boiler breaks down in the middle of the night an agent will be able to be there in an instant.
- Don’t get carried away with information on how much an area has increased in value. Carefully analyse the statistics and assess if property prices across the board have increased or if the increase is due to a specific type of property, and doesn’t relate to the type of property you are buying.
- Don’t forget to get the correct insurance. Contents insurance, building insurance and public liability insurance will give you the protection you need and the peace of mind you want.
- Don’t pay for a property with cash as tying up all your capital in one property is not a good use of capital. The same money could be used to put down deposits on a number of properties.
- Don’t be afraid of or ignore accountancy and financing skills. Invest in or develop your own portfolio management tool to monitor all the financial information about each of your properties and to allow you to make informed decisions when looking to invest in further properties.
- Don’t overextend yourself – a profit and loss forecast will enable you to decide the right pace and timing for building your portfolio.
- Don’t try and do it all on your own – put the right team of experts in place from mortgage brokers, accountants, legal advisors, insurance brokers, letting and managing agents and a maintenance team for when things go wrong.
- Don’t buy a property before deciding what type of tenants you want to attract. Decide whether you want to have a mix of tenants in your portfolio as well as buying properties in different geographic locations.
- Don’t sell any properties unless absolutely necessary or you’re changing your portfolio strategy. Building a property portfolio is based on appreciating assets.