Some Mistakes We Made as a New Property Investor

Some Mistakes We Made as a New Property Investor

My wife and I started property investing in 1994. We did not know what we did not know. We flipped property…we started a bridging company….very very slowing and even started building houses with a builder who worked for one of our investors of the bridging company. We learned how to evaluate deals…focused on risk and on PLAN B scenarios. However some of the mistakes we was more in management of our rental properties. There are no HMO properties in the US. We did basic vanilla buy to let.

The biggest mistake I made as a new investor was not hiring a proper property management company. When we purchased our first single-family home, I had no idea the amount of work that came with it. I really must qualify the word…”PROPER”. Too many property management companies over promise and under deliver. We had this with our Professional HMOs. The Property management company was a disaster. However we both manage ourselves our Professional HMOs and when we sell one of them we have an estate agent who is really on the ball. Having the proper estate agent is what differentiates success and failure in property management….

Getting back to our inexperience…Clearly….some tenants can be a headache. They aren’t all troublesome, but most of them can be. Yes, a management company charges a fee from the gross rent, but the peace of mind it gives you is worth the money and time. I once told a tenant to feel free to call me. He took that as all of sudden we were buddies…. That was a very bad idea. Every little thing that happened, I got a call. Most of the calls were outside the realm of my management of the property. In fact, they were usually personal matters. Tenants are not friends…there is a line and keep it.

Be a property investor, an owner, and a property manager generally proves too many hats to wear. Yes we have a management company, we can just oversee them and delegate tasks to them. That way, I can focus less on micromanaging the properties we already own and more time sourcing…purchasing and even selling new properties. Focusing on higher value activities is what drives business.

Quite simply….Investors invest. Property managers manage properties. More so, strongly suggest under leverage….be liquid.