Types of properties you shouldn't invest in

Flying freehold: The common problems associated with flying freehold are determining whose responsibility it is for carrying out home repairs, problems with access arrangements and resolving challenges when there are new owners.

Shared ownership: You may be able to enter the market with lower capital using this strategy however shared ownership comes with a lot of added costs like utility bills and service charges. The properties are also leasehold which means you will never truly own the property, so making alterations etc. will need approval.

Off-plan properties: These properties often have discounts attached, but developers usually overestimate the end values, agents will verify these figures because they want the business, which questions: How much are you actually getting in terms of a discount. Delays are commonplace on housing projects like this, there’s also risk of the developer going bankrupt and potentially losing capital invested.

Certain New builds: One of the most significant concerns for buyers of new build homes is the challenge of limited space and storage. Same as off plan, developers can over-price the units and sometimes there aren't many comparables in the area to sense check these numbers. They are a lot of poorly constructed new builds too which often have a lot of snagging issues.

Certain Leaseholds: You don’t want to be investing in leaseholds that have big service charges and ground rents, if you’re looking at using the property for serviced accommodation or a house of multiple occupancy, the lease or the management company (if its a block) may have clauses that stipulate you cannot do this. You may also struggle to add value to the property as any major alterations to a leasehold need consent from the freeholder.

Overseas Properties: Can be volatile due to unfamiliar regulations, fluctuating exchange rates, and market trends, as seen in places like Bulgaria and Spain. It's safer to invest in a familiar market.

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KOVE offers both portfolio building and property training, based in the North East of England in the United Kingdom. Please note, this is not financial advice.