Different anxieties holding back property investors: Paul Nugent

GUEST OBSERVER

Property investment is a thicket of anxiety-inducing moments, according to our recent research. There is hardly a stage in the process that doesn’t make some investors break out in a nervous sweat.

The most worrisome aspect of investment is choosing the right property. Which shouldn’t be a surprise given the sheer choice and variety of property types investors have to choose from. Moreover, even a novice investor knows that investment performance varies between properties and that the cost of getting it wrong is high.

The next most troublesome part of campaign is around finding a property manager and good tenants.  It’s not a misplaced fear and I’m glad to see prospective investors are thinking about it. With the excitement attached to the buying process, it is vital that attention is paid to this less glamourous aspect if money isn’t to be lost on high tenant turnover and vacancy.

The bronze medal for principal fear is shared between two elements: securing lending and negotiations. I suspect the fear of securing lending relates as much to the choice and complexity of lending options as it does to receiving a yes or no from the bank manager – although with increased talk of tightening lending standards I may be wrong.

The negotiation is the main fear for 17% of investors. I’m pretty confident that number skyrockets when it comes to making an offer!

Bringing up the fear field is settlement at 4% – a low number which may indicate a degree of complacency about a necessary part of the process that can cause huge headaches if it goes wrong. By the way, no one seems to worry about managing a portfolio. Perhaps that’s seen as looking too far into the future.

I’ve no doubt that many a hopeful investor has walked away from property over the years because these multitude of fears have been too much. Of course, like many fears they can be overcome. The key is to break the problem down into manageable parts and to do the proper research and preparation for each element.

Paul Nugent is a director of Wakelin Property Advisory. At 12.30pm, Wednesday 17 June he’ll be presenting a webinar, The six steps to safe residential property investment. Click here to register.