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Due Diligence in Property Investment:

Due diligence for investors is just another name for doing your homework properly. It is essential that before you put your hard earned cash (or even worse, someone else's) into a property, that you go in with your eyes open, in full knowledge of all the relevant facts and figures. Otherwise, to mix metaphors, you're liable to get your fingers burnt!

You need to thoroughly research every aspect of your property investment: its location and the future prospects for the area, price/value equations, rental levels, comparables and tenant demand, planning and use issues, business rates and local council taxes, covenant strength of any tenants etc.

This section gives you a handy checklist and guide to the process of carrying out your own due diligence. It's very easy when you by properties to get carried away with your excitement, to let your emotions run away with you - I know, I've done it! You've just got to discipline yourself and not skimp on the time and effort you put into objectively and sceptically analysing every aspect of your property investment decision.

There's been several instances of late where commercial properties have been sold at auction to investors who went in with their eyes closed. The rents had been inflated to give an attractive yield - the tenants did not have a hope of paying rents at that level. Inevitably, the investments collapsed.

Other instances involved sale and lease-back deals with businesses on the verge of collapse before the deals were done. Thorough and objective due diligence, by no means rocket science, and within the ability of any property investor, would almost certainly have steered these investors away from trouble avoided such disasters.

Information here is general only & believed to be correct, though we cannot guarantee it, nor do we accept any liability if you act or fail to act on this information. Always seek professional advice before making decisions. Investments can go down in value as well as up over  time.