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In a property market that is once again showing selective margins for action — especially for those looking for assets to enhance or convert — more and more investors are making their first structured purchase.
Luxury villas in tourist locations, small hotels to be repositioned, residential properties with income potential. The range is wide. But for many, entry into the sector is accompanied by uneven preparation: entrepreneurial experience and available capital, but a method that is still immature.
There are three recurring mistakes in property investment that emerge in early transactions. And they do not so much concern the choice of property as the way in which it is analysed.
1. Partial due diligence
when the documents arrive after the excitement
Many investors underestimate the impact of incomplete due diligence. Is the floor plan compliant? Is the intended use in line with the forecasts? Are there any restrictions, easements or condominium resolutions in the pipeline? The chain of checks — urban planning, cadastral, legal, plant engineering — is often addressed late or in a fragmented manner.
Yet, just a few unchecked elements are enough to significantly alter the economic profile of the transaction. A renovation to be completed, a pending SCIA (certified notification of commencement of works), an unreported condominium arrears: details that become costs or delays.
In the case of more complex transactions — tourist properties, mixed-use properties or properties to be divided — the lack of a coordinated preliminary analysis can compromise the entire plan.
2. Unrealistic expectations
Property investments with a business plan that only works on paper
A second mistake concerns the relationship between forecasts and the actual scenario.
Especially in early investments, Excel spreadsheets tend to reflect ideal conditions: maximum market rents, zero vacancy rates, short absorption times, and low operating costs.
The problem is not optimisation. It is not having a second, more prudent hypothesis to start from.
Those who work with a professional approach build alternative scenarios, insert margins, and simulate delays. They reduce estimated revenues, increase recurring costs, and postpone exit times.
If an operation only works if everything goes smoothly, it is not solid. It is vulnerable.
3. Unbalanced leverage
too much, too little or poorly distributed
The third mistake concerns the financial structure. Attention is often focused on access to credit, without considering the balance between debt, equity and liquidity reserves.
In some cases, leverage is excessive: sustainable only with low interest rates and rapid returns. In others, it is too low, with capital tied up that could generate higher returns elsewhere.
Once again, the point is to build a system that can withstand:
– consistent debt coverage ratio,
– realistic cash flow estimates,
– operating liquidity reserves,
– simulations on critical variables.
Rather than maximising theoretical returns, the aim is to ensure stability over time.
Those who tackle these variables independently risk having to learn as they go along.
Where there is no professional system — or coordinated technical support — the errors listed above become more likely.
This is not due to naivety, but rather to overlapping roles: the investor searches, evaluates, decides, negotiates, verifies, plans and finances. This is a difficult burden to manage alone, especially in the early stages.
This is where, in recent years, hybrid entities have developed: consulting firms specialising in real estate investments that do not just propose properties, but also support investors in developing their approach.
The task is not to promise margins, but to provide structure, control and verification.
This is especially true in the initial phase, where the risk is not making the wrong purchase, but setting it up in a fragile way.