The Difficulties of Investing in Property as a Beginner

Getting on the property ladder is an aspiration shared by many 20 – 40 year olds. 

When prices have been rising generally for many years, it’s natural to experience FOMO (Fear Of Missing Out) and to want to invest in property as soon as possible

Not to mention the fact that owning a house is seen as a real status symbol. For many people, it marks the boundaries between young adulthood and becoming a ‘real’ adult or starting a family. 

With such rich cultural connections between property ownership and these life goals, it’s not surprising that it’s an investment that many people consider at some point in their lifetimes.

Investing in property is anything but easy

But it’s worth remembering that a house is probably the most stressful purchase you can make. 

This is all too easy to forget when watching TV programmes about property investment, where transactions occur in the blink of an eye, and much of the tedious administration is hidden from view.

It’s important that before you set out on your first investment, you should be in possession of all the facts, and that includes the trickier aspects of closing your first property deal. Let’s discuss these in this article.

What is the most difficult part of investing in property?

There are several aspects of property investment that could each be seen as the downsides:

  1. Choosing a property

Unlike stocks and shares, which are homogenous in terms of their contractual risks and rewards, properties are incredibly unique. 

Different regions of a county, areas within a district and even properties within a street will all have subtly different appeals and downsides. 

At the larger scale, there are aspects such as access to public transport, the desirability and aesthetic of an area, the quality of local schools. 

More locally, you will want to understand whether there are any issues with neighbours, how is mobile phone signal and internet connectivity (very important in an age of homeworking). What is the garden like, and how is the view? Is the back of the house ‘overlooked’ by other properties, and what are the levels of light at different times of day in key rooms?

As I’ve hopefully pointed out – there are almost as many considerations and criteria when buying a home, as there are neurons in the human brain. 

It’s easy to become paralysed with indecision, as you will find yourself having to trade-off the length of a commute with the shape of a kitchen. This is a very difficult choice to make. 

  1. The process of buying

Buying a house is a long-winded process, involving lawyers on both sides, and representatives from any banks providing finance. 

This is then compounded by other transactions occurring upline or downline in the house transaction chain. 

The ideal scenario is where you are buying a home as a first time buyer, and the seller already has a property to move into. This means that your transaction has no onward chain and is only conditional to you both agreeing to the deal. 

However, where longer chains exist of 3 – 4 properties, it’s all too easy for a single property transaction to fall through, and for this to cause a ripple of cancellations or delays down the entire chain. 

Even once you’ve executed the contract to purchase the house, it can take over a month for the transaction to formally ‘complete’, i.e. where you make the payment and you receive the keys to your new property. 

Summary

With these two points in mind, it’s worth setting your expectations at a realistic level regarding how ‘easy’ and ‘smooth’ a property investment will be. 

Be prepared for and expect a lot of gut-wrenching decisions where you will need to compromise between two aspects of a property you considered ‘essential’. 

Also, be prepared for the property purchase to take several months from start to finish – it may even take you 9 months to move into your dream home. 

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