Bigger Isn’t Always Better

I’ve made this mistake not once but at least three times over the course of the last 10 years in my property investment ‘career’. It’s easy to do (must be if I did it).

When I first started looking at property I always viewed it from a vey inspirational view point. I wanted the biggest and the best.

Here are two examples of my ego related property “faux pas”

Faux Pas Numero Uno – The City Centre Penthouse

This property is a city centre penthouse. A fantastic view, and wrap around balcony. Value £175,000 (although I bought it for £140,000). Properties on the lower floors were about £25k less. The rental value for my property was £850/mth whilst those below were £800/mth. Is it worth paying another £25k to get another £50/mth rent? My logic said that my property would be more desirable in the future as it’s a ‘one –off’. In the meantime I’m not making as much monthly profit as the apartments on the lower floors.

Faux Pas Numero Deux – The Beach Front Penthouse

Again fantastic location, great balconies, sea views blah, blah, blah…but, when it comes to returns it failed miserably financially. In this instance my property, although twice as big was twice as expensive. The rental amount that I get is only slightly more than the cheaper properties.

Again I’m sure when I sell, I’ll make good money but in the short term my returns are poor.

Lessons Learned:

  1. Don’t let your heart rule your head
  2. Crunch the numbers BEFORE you buy
  3. The biggest may not always be the best
  4. Buy for investment and NOT to massage your ego
The Buy To Let Landlord