For property investors, finding an opportunity which provides a strong return on investment is key. Throughout the process however, there are potential mistakes that an investor can make which may come at the detriment of their investment. Like with all mistakes though, there are ways you can avoid these pitfalls!
Read our guide on the most common mistakes made when it comes to investing in off-plan property and what investors can do to prevent them.
Missing the initial research stage
A critical part in any property investment is making sure you’ve undertaken thorough research before proceeding. This will allow you to make a clear decision on the location, asset class and length of time you want to have your investment for.
Say you’re looking at investing in residential off-plan property in Leeds city centre and you didn’t know too much about the area. You need to make sure you’re well versed on points such as the geographical location of a prospective development and what is in the surrounding area, the city’s demographic and whether it aligns to key rental market, the demand of high-quality property in a premium location, and the overall economic outlook for the city.
This can be done by reading reports from local news outlets covering stories from the city, tracking the latest housing market reports from the region and keeping an eye out for any updates which may be surrounding the prospective development as well as others in the area.
Doing your research in the first instance means you’ll be more informed on why on why Leeds would be the right city and that the respective development is the right one to invest in, compared to going in cold and potentially making the wrong choice.
Not understanding your investment objectives
A common mistake during the investment process by investors is not understanding your overall objectives for purchasing an off-plan property.
Essentially, you’ll be investing in off-plan property for either building capital growth or generating rental yields. Capital growth is where the actual value of the property appreciates and is often an objective for short-term investment strategies. Rental yields, on the other hand, are associated with long-term strategies where the monthly rental charge is compared against the property value.
Before investing in off-plan property, make sure you’re clear whether your investment objective will be for a fast capital gain or if you’re in it for the long haul to generate strong rental yields.
Lacking in investment confidence
Investing in off-plan property can bring with it a whole mix of emotions – especially when you reach the point of reservation. Although you may feel excited for your investment endeavour, the realisation may also create feelings of nervousness and leave you lacking in confidence in your investment plan. This is the point where potential investors may withdraw from proceedings and miss out on a great investment opportunity.
However, if you’ve undertaken thorough research around the demand, location and costs, as well as having a full understanding of your investment objectives and strategy, you should have the confidence to proceed.
Keeping emotions to one side
Listening to your heart over your head when it comes to making a big decision can one be one of the biggest mistakes when investing in off-plan property. Whether it’s an area that you personally favour or a property design you like the look of, choosing an investment on preferences such as this can create potential pitfalls.
The key is to make research and data-driven decisions when it comes to prospective property investment. This way, you can ensure you’re taking the right approach to investing in off-plan property which can maximise on returns.
Avoiding the common pitfalls for a successful off-plan property investment
Throughout the process of investing in off-plan property, there are a few potential – often common – mistakes which occur. However, through doing your research and understanding your objectives, you can avoid some of the common off-plan investment mistakes and secure an opportunity to help you reap a positive return on investment.
Citylife is creating new high-quality residential buildings in Leeds, across premium city centre locations, perfect for investors seeking new investment opportunities in a fast-growing city.
Find out more about our live developments of off-plan investment properties in Leeds here. If you’re interested in investing in the off-plan property Citylife is developing, get in touch with us today.