Many investors start out with the intention of of building a portfolio and creating wealth through property, but only a handful of investors end up making it past their first investment and are able to build their portfolio to build real wealth.
According to experts, this is why;
Not getting professional advise and help.
It is crucial to have the right finance structure in place. A good mortgage broker will be able to advise you on the best finance structure and lender that suits your individual circumstances. Going to a bank directly will not necessarily set you up with the best deal and could cost you thousands in additional interest.
You should also ensure that you deal with an experienced broker with vast experience in obtaining loans, one that is trustworthy because of the increasing con artists in the industry.
Waiting for the perfect time
While it is very important to get a grip and understanding of the market you are buying in, it is more important to ensure you pay the right price for the right property rather than trying to time the market.
One of the biggest set backs for rookie investors is they try to time the market and are willing to wait for a better deal. This is fraught with risk of missing out entirely and will only result in analysis paralysis.
It is almost impossible to predict precise housing price trends in the future. If you wait too long you will stunt the growth of your portfolio.
Underestimating costs of purchase
Always factor in additional costs when making a purchase on a property. Apart from the deposit for the property, you will need enough money to cover stamp duty costs, legal costs (solicitor), other finance costs (such as lenders mortgage insurance), insurance, building and small incidentals (such as maintenance and repairs to prepare the property for tenants). These additional funds can also give you some support if you do not have tenants immediately entering the property upon settlement and you have a few weeks vacancy in the property.