5 Rental Property Investment Mistakes You Need to Avoid in 2021

October 29, 2020

Rental property investments can be a sound financial investment. However, there’s more to just purchasing a property and finding tenants to pay your monthly rents. New investors need to choose the right property to get proper benefits from their large investments. 

Often with their little to no experience of the market, new investors can make some severe mistakes with their rental property investments.

Here, we list five mistakes you can avoid when making investments in rental property in 2021.

1. Underestimating repair costs:

When trying to purchase a property to rent out, it is easy to underestimate the repair costs that need to be done. Watch out for rental properties that will need a lot of work before they can be rented out. Sometimes, properties with great deals often cover up its heavy repairs, which can add a lot to your time and budget. Such properties can take a lot of time to be repaired, which means they will stay vacant for longer periods, hitting hard on your profit and time.

2. Poor location choice:

Rental property investments thrive on location. Your location choice should be comfortable enough to travel from time to time and appealing to potential tenants. Be wary of undesirable places with “great deals.” Conduct your own research of the adjacent areas, and look out for aspects that will intrigue your prospective tenants. Consider investing in rental properties are closer to tech corridors; to facilitate working professionals and employed personnel.

3. Negative cash flow:

It is natural to be quite excited when you are purchasing your first rental property. However, there are some things you should watch out for to avoid negative cash flow. You should avoid investing in properties with a lot of vacant properties around. This will hurt the value of your property and will indicate a low demand. Also, when there’s less demand, be flexible with your rent. It is better to get paid something rather than nothing.

4. Extreme renovation:

Just like underestimating repair costs, you should not go overboard with renovations. While it is essential to renovate your rental property investments to make them look more enticing to the prospects, you should not over-renovate it. Over-renovation will cost you a lot of money and time, and the longer your property stays vacant, the longer will be your loss.

5. Failing to seek help:

New investors often head out into the property investments with little to no knowledge about the market. This can cause them to make a lot of mistakes, hurting their investments. When in doubt, seek the help of experts. These experts are veterans who have learned the market inside out and can help you out from challenging situations. They can even advise you on good deals and set you up perfectly. Seek help from experts when in need instead of being a lone ranger.


With the new year only a couple of months away, you can start your journey into rental property investments by avoiding these mistakes. You can always come up to us at Perfect Real Estate Investments, and we can help you out through your investment journey. We have the right arsenal to set you up for years of success. Call us today.

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