Avoiding 12 Common Novice Property Investors Mistakes & Ensuring Higher Rates of Return

Property Real Estate investment in Thailand has provided many investors with positive cash flow and the satisfaction of making a positive impact on others’ lives. Like any investment however, real estate has intricate nuances and market trends that when ignored can cause an investor tremendous heartache. Unbelievably many first time investors are willing to part with their hard earned cash without taking the time to study their investment. They rely on traditional trends and gut feelings.

Before you risk your investment take the time to learn all you can about your market. By aligning yourself with the right professional you can avoid these common mistakes and ensure an excellent return on your investment.

1. Failure To Determine Your Time Need – When do you need to have access to the investment funds; how long can you leave them growing? Cash flow, capital appreciation and equity pay-down are just some of the things that need to be addressed to assess your time needs accurately. Service-minded real estate professionals can be a tremendous help in assisting you in this area.

2. Not Checking Out The Seller Or Sellers Agents Numbers - Claims of extremely high rates of return run rampant in all investment markets. Do not get caught up in the excitement - check everything; rents, payment history, taxes, expenses, deposits, future modifications... everything! Make sure you have the right buyer’s agent. At First Choice Homes we say “it's like having a good insurance policy against overlooking all the seemingly insignificant but very important details”.

3. Forgetting You Are Buying A Business - Owning investment property carries with it a great potential for creating wealth and... some potentially difficult decisions. You will use a totally different set of decision-making parameters if you are buying and owning a property for investment purposes rather than for your own place of residence. Re-investment into the property and time management all need careful consideration. Remember this is not a 'hands off' business. With a good project management company like First Choice Homes on your side you do not always need to be present here in Thailand. You can confidently let them handle things this end as you know that they will keep you informed. Check that your advisor has your best interests at heart. Thailand Property

4. Avoid Negative Cash Flow - Property that eats cash every month can drain your working capital. A strain on your cash flow may cause you to sell the investment before the benefits of ownership are ever realized. So choose the right property in the first place and ensure that you have sufficient funds. First Choice Homes sit down at the beginning and go through the costings in great detail. Fore-warned is fore-armed!

5. Failure To Do A Thorough Inspection Beforehand - Look under every rock! Hire a professional inspector. Ask existing tenants or local residents about pest problems, structural damage or reoccurring problems. Don't overlook anything! When investing your hard earned money be sure and use sound business judgment! Take professional advice. At First Choice Homes we are able to offer a whole range of survey services.

6. Failing To Have Adequate Insurance - Investment property brings liability. Tenants, cars, parking lots, cleaning facilities, property liability - the list is quite extensive. Adequate insurance coverage is an absolute must! Be sure to consult with an insurance professional and protect your hard earned assets. At First Choice Homes we are able to offer a whole range of insurance services.

7. Inspect, Approve, & Confirm All Documents - The list of documents that need to be proofed can be overwhelming to the first time investor. Building permits, zoning laws, rental and lease applications, underlying loan documents, bye-laws, title policies, inspection reports, purchase contracts, insurance.. Do not attempt to do it alone. The right professional can remove most of the stress and bring the transaction to a conclusion smoothly and at First Choice Homes we ensure that all documents and statutory requirements are in order.

8. Charge Fair Rents - Vacancies, turnovers and lease terminators are your biggest expense. Charge fair rents, treat your tenants with respect and respond as quickly as possible to their needs. It is a lot less costly in the long run to take care of the little problems rather than wait until they become big problems. Vacant property is your Achilles heel. For absentee or busy landlords find a reputable property management service. At First Choice Homes we are able to offer a whole range of property management services.

9. Select Qualified, Good Tenants from the Start - Take the time to check references. Previous landlords, employers, financial references, credit and judgments are all vitally important. If there are any questions do a thorough investigation. Drive by their previous residence. A little work up front can save tremendous problems later. Alternatively, use a reputable agent to take care of this for you. At First Choice Homes we are able to offer a whole range of tenant vetting services. Thailand Property

10. Whenever and Where-ever Possible Leverage Your Investment - This means borrow against your property when you can. It has been said that over 90% of the world's millionaires got there by owning property. The reason property is such a powerful way to build wealth is due to one key concept: leverage. Now, if you are an experienced investor this may be obvious, but for the benefit of those who haven't seen the light, let me explain ... leverage is your ability to magnify your returns by using other peoples' money (in this case, it's usually the bank's money). Not only do you gain on the margin between cost of borrowing (interest rate charged) and yield (rental income) but you also enjoy capital appreciation on the whole amount invested, not just your contribution. At First Choice Homes we are able to offer a whole range of investment services dependant upon your personal circumstances. Loans can now be arranged both here in Thailand and back home in country of origin.

11. Failure To Re-Invest In Your Assets - Most successful investors have well maintained properties. Be sure to re-invest your cash flow back into clearing any outstanding maintenance problems there might be on the property. This increases the value of your asset and increases your equity which builds your net worth. At First Choice Homes we are able to offer a whole range of renovation and building services.

12. It Is Not In The Selling Of A Property That Profits Are Maximized, But In The Buying. You would be amazed at the number of both first time investors and indeed seasoned investors alike that miss out on this. Look closely for the added buying incentives currently available on most new developments or look at buying off-plan where savings in excess of 20% can be found. First Choice Homes currently have several opportunities available through show home investment schemes or off-plan pre-construction incentives that can offer as much as 150% R.O.I. over a 2-3 year period.

Investment property can be one of the most rewarding aspects of your financial portfolio. Be certain to have all your ducks in a row before you invest. Do your homework! Consult with a professional agent and protect yourself from the hidden troubles that can plague first time investors.

At First Choice Homes we are able to offer assistance in all aspects of property investment, including offshore company formation, taxation planning and general investment strategy planning. To seek further detailed advice from myself or my team on any of these areas please contact me by email or call on: (+66) 087-600-1704.

Article Source: http://www.RealEstatePropertyArticles.com.

About the Author:
Mitch Malone is Managing Director and founder of the First Choice Group of companies with offices in Pattaya and Hua Hin here in Thailand. An ex-pat for over 20 years, feel free to refer to his company’s website at http://www.1st-choice-homes.com for a wealth of information on living in Thailand. To seek further detailed advice from Mitch or his team please contact by email from the website or call on: (+66) 087-600-1704.