The Top 5 Mistakes People Make When Buying an Investment Property
Have your eye on an investment property? Before signing on the dotted line, make sure you’re not making one of these critical mistakes
1: Ignoring the Numbers
Buying without knowing how much monthly cash flow you’ll generate – or what your overall investor financial picture will look like – will cost you in the long run. Remember; the goal is to make money, not to buy a property only to lose money each month. Making a smart investment decision requires knowing which markets to buy in, understanding what types of properties to purchase, and sitting down and running the numbers. (Don’t worry, I can help you with all of these!)
2: Leaving Life Out of the Equation
Long before buying an investment property, you need to choose a strategy that fits your lifestyle, budget, and risk tolerance. For example, consider how much time you can realistically devote to your new property. If you’re a busy family with a jam-packed schedule, doing a major flip or having short-term rentals may not be the best fit. Instead, look for a turnkey, single-family or duplex property, and consider hiring a property manager.
3: Skipping an Exist Strategy
While it’s easy to get caught up in the moment, it pays to map out an investment exit strategy (and will cost you money if you don’t!). As we’ve all seen lately, the market can shift on a dime. That’s why it’s more important than ever to plan how you’ll adjust if the market shifts. Will you ride things out? Immediately list your property? These are just a couple questions to consider when investing.
4: Treating it Like a Hobby
Buying an investment property means you’re operating a business, so treat it like one. As every entrepreneur knows, there will also be challenges along the way and things won’t always go as planned. This is where mindset comes in. You need to have a positive, “make-it-work” attitude, to pivot when necessary, and to surround yourself with like-minded entrepreneurs for long-term success.
5: Doing it Alone
I’ll put it to you simply: Buying an investment property is no joke! There are so many small and large details to consider as you put things into motion. That’s why it’s crucial to have a power team and reliable systems on your side to help you manage the process. Unsure of where to start? I have a trusted network of lawyers, accountants, property managers, handy people, general contractors, and tradespeople to help you along the way!
Looking for more personalized support?
Hi, I’m Meaghan Lazenby. Mom of two, happy wife, and nature lover.
As an investment-focused realtor serving the Greater Niagara Region, I help families create a lifestyle they love by purchasing their first or next investment property.
If you’re intimidated by the process or simply want an expert by your side to help you navigate each step, I’d be happy to chat. Simply click the link below to book a free, no-obligation consultation call with me.
