We talk a lot about the benefits of investing in property and, of course, it is hugely rewarding over time. But, as with all things, it isn’t always plain sailing.
You need to have the time and expertise to follow through with the end-to-end process to ensure you have a successful and profitable property investment. Don’t and things start to go WRONG very quickly!
Below are some of the challenges you may face as you embark on the journey of investing in property.
❌ Last-minute viewings
Have you found a perfect property, but you can’t book in to view it because it’s had too much interest? If you’re lucky, a cancellation could come up, but you might only be given an hour’s notice.
To help us in these situations, we have a team of viewers based on the ground in our investment locations – But how would you do this if you are 250 miles away or at work? The reality is that good properties don’t hang around until you have time to arrange a viewing, so it’s likely that you would miss out on them.
❌ Difficult tenants in-situ
There are some properties which seem like a great opportunity, and you wonder why everyone else seems to have passed on them. While most tenants just want to get on with their day, some can cause challenges such as cancelling access last minute or refusing to vacate the property while refurb works are carried out.
In these instances, it is important to be super flexible and start building a relationship with them. If your budget allows, you could even see if there is any work they would like to get done to the property by the landlord. This can help to bring them on-side and can be the difference between finding a gem and passing on one, but it all requires expertise.
❌ Off-market properties
The property market is extremely competitive and with everyone scouring Rightmove and Zoopla for ‘deals’, sometimes you need to look for other ways to find a property. Introducing off-market deals – these are properties that haven’t yet come to the market and typically get scooped up before they even get advertised.
But how do you get access to them? Developing relationships with local estate agents is key here and at Lifestyle Property People our business is built on this. You need to get to know the agents in your local area face-to-face. Talk to them about what it is you are doing and assure them that you’re a serious buyer who knows what they want and can move quickly.
❌ No time to conduct due diligence
Investing in property is a numbers game and you need to view as many properties as possible – sometimes up to 15 a week to find the one that might be suitable for you. But viewing properties takes up a lot of time – from organising the viewing with the estate agent, travelling to and from the property and then actually spending time viewing and costing up any refurbishment works, not to mention carrying out the DD before you can put in an offer. Each property can easily take up 3 hours before an offer can be made and if you don’t have time to offer on at least 3 properties per week, you probably won’t be able to bag the best deals and may want to consider getting some support.
❌ Best & final offers
It is often the case that there will be multiple offers on the property you want – it’s one way of knowing that it’s a good property. But in these circumstances, estate agents revert to ‘Best & Finals’ – where every bidder has to put in a blind offer by a certain deadline. It’s hard to game this system, but there is a way and it’s when your relationships with local agents can really add a lot of value.
But they don’t happen overnight. You need to make the effort to regularly keep in touch with them so that they understand your model, have seen the results and know you are a serious buyer. Once they trust you, they can help you win over the seller and secure the deals over other bidders. Is that something you have the time, energy or inclination to do? If not, you could just use ours 😉
❌ The stress of being chased
Purchasing a property can be a game of cat and mouse. Sometimes you’ll be chasing the seller and sometimes they will be chasing you. Usually, the estate agent chases both parties because neither knows the process and it’s just easier to keep everyone on their toes. This is rarely helpful and can cause unnecessary stress for all parties.
However, showing the agent that you understand the process and are on top of it can de-escalate their nerves and lead to a much better experience. If done successfully, agents may begin to send you deals off-market because it makes their lives easier to work with someone that understands the process. At Lifestyle Property People we have an experienced team that has completed over 350 purchases and can guide our clients through the entire process.
❌ Down-valuations
This is a common occurrence in today’s market, and while it can be a nightmare, with you having to top-up the mortgage with a higher deposit, it can also be a blessing, if you can agree a lower purchase price with the vendor.
In such circumstances, you need to be able to build a case, backed by evidence to convince them to reduce the price. While some of the information can be found online it is a little out of date and the records of recently sold properties needs to be sourced directly from local estate agents. This is when strong relationships and local knowledge are vital. Do you have the knowledge and expertise to win in this situation?
❌ Sales falling through
30% of all sales agreed in the UK fall through at some stage, sometimes, through no fault of your own, and the only thing you can do is go back to the drawing board and look for another property.
Can you really be bothered to go through the whole process again? If you’re like most investors, your time is valuable, and it can be frustrating having to redo work. At Lifestyle Property People, we view properties every week, so if one falls through, we can usually find you another one within a few weeks.
❌ Unreliable contractors
You can plan a refurb schedule to the minutest of details but ask any property investor and they will tell you that unfortunately, tradespeople aren’t always reliable. Some don’t turn up, some are late, and some just do shoddy work. If you don’t have a reliable refurb team on your side, the likelihood is that your refurb will be delayed, delaying your rental income and costing you money in mortgage payments.
You need to spend time vetting local tradesmen and putting together a team that can work together. A project manager could be an alternative on such projects, but they aren’t easy to find and can become quite expensive, especially on small refurb projects. At Lifestyle Property People, we have in-house PMs that work with tried and tested contractors to ensure we get the outcome that is best for you.
❌ Incompetent managing agents
The value of your investment is somewhat determined by the quality of the managing agents you use, so it’s important to find a reliable partner that you can trust. You need to find one that has experience in managing your target tenant type, a proven track record of achieving the best rents, and the ability to find and vet quality tenants in a reasonable time period, all while ensuring a hassle-free process for you.
While it can be a bit of a trial-and-error process, can you afford to keep making mistakes in finding the right management agent? We’ve worked with over 20 recommended managing agents over the years and have slowly whittled down the list so we know from experience that we’re using the best ones.
❌ The property not renting out
Unfortunately, if you don’t know the area, you could choose a property in a location that isn’t very desirable for your ideal tenants, meaning that it won’t rent out, or it will rent out, but at a lower-than-expected rent or to ‘less desirable’ tenants.
It really comes down to knowing your investment location inside out so that you find a property where there is far more demand than supply for your chosen tenant type. It’s a lot easier to be confident in your purchase decision when you have already rented out over 350 properties in that area.
Why are we telling you this?
Well, it’s easy to think you just buy a house and rent it out, but in reality:
- It’s not glamorous
- It takes a lot of time
- It requires boots on the ground and attention to detail
- You need to know what you’re doing
And if you don’t have the time or the know-how, there are companies out there (like ours 😉 ) that can take away the stress and hassle and just do it for you.
So, if you really want to invest in property but don’t have the time, headspace or desire to do all the legwork yourself, click here to schedule a free consultation with one of our team.