Investing Myths That Hold Investors Back Whilst Investing in Property & HMOs

There are too many myths and misconceptions about investing in real estate today. Some hold would-be investors back from getting involved and ruin their potential. More so, too many course sellers promise the world and in the ” Real World” one learns the hard truths. Other misconceptions lead investors to make serious mistakes. Here’s what you should know, at least in my opinion as one who is on the front of investing in property and survived 3 property recessions and crashes.

1. It’s just like TV or as they taught in the HMO Course

   On the TV shows…they glorify the concept of owning property and almost make it look easy. TV programs do not show you how to set yourself up…ie via a LTD or personally own the property, find contractors, fire contractors & continue the project. They often make it seem too easy. There are important steps in the setup, and there is often more to the net numbers. These things are essential for investors to be aware of.

2. You have to handle the ugly stuff ( Toilets) or you can simply give it to an estate agent. 

   Neither of the above are accurate. You do not have to physically do the grungy stuff…however to find an appropriate estate agent is like finding a needle in a hay stack.

3.  It’s quick and easy.

Never easy…and always delays….always unexpected expenses

4. You need a lot of money to get started or You Do not need money at all

Both are wrong. You need to start slow..build experience…the money will find you if you have a track record and a good deal. Do not over leverage yourself. It seems most of the investors I speak to simply use interest only and are over leveraged. The question will they be around during the next eventual property turn down. It will happen, but the million quid question is when?

5. Raising rents will forced tenants out

Not necessarily….everything is a balance. Lets face it, our costs are increasing we have to try to raise rents if possible

6. One can invest in property ” Passively”

If you are fortunate to find the right property manager, possibly. Or for those that want to invest in a property fund…good luck as right after Brexit, they froze redemption’s.

7. The property Market will always go up!

Sure….as much as the sky will not fall property must go up. Actually after going through this last property crash, I was shocked how cheap got. Funny thing most people ran for the hills and now prices are going up and going up….yet more “investors” are coming to the party!

The above thoughts can be really harmful for those who aren’t truly aware to the above points. Property is one of the best—if not the best—way for many to get and stay ahead financially. Hmos are even more of a way to prosper!