One of the Biggest Mistake in Real Estate is Buying Based on Emotion Rather than Numbers – Simisola Tomori

By Tosin Clegg

For first-time property investors one of the biggest mistake is buying based on emotion rather than numbers. People often fall in love with a property before understanding whether it is actually a good investment. Other common mistakes include underestimating refurbishment and development costs, failing to budget for unexpected expenses, not understanding planning or licensing requirements, overestimating rental income and ignoring financing costs.

Another major mistake is failing to have an exit strategy and that’s where the expertise of Simisola Tomori comes to play. She leds Simabel Realty where she delivers client-focused real estate solutions including property sourcing, investment advisory, and project management, helping clients make strategic and profitable property decisions.

Before buying, you should understand what you intend to do with the property, Tomori points out. Whether it is that you are holding it for rental income, refinancing, selling, developing or using another strategy it needs to be clarified. She also stated, “I would always encourage first-time investors to get proper professional advice where necessary. Property is an expensive place to learn from avoidable mistakes.”

Funding is a very important part of property investment, because a good deal is not necessarily a good investment if it cannot be funded appropriately. Tomori further establishes that she helps investors understand the different funding routes available depending on the project, which could include personal capital, mortgages, bridging finance, development finance, private investors or joint venture structures.

“My role is not simply to tell someone, “Go and get finance.” We look at the numbers, the project, the investor’s position and the funding requirements to determine what may be appropriate. I also emphasis the importance of understanding the cost of finance, because interest and financing fees can significantly change the profitability of a project.” She adds.

On balancing profitability with the need to deliver quality, sustainable and affordable housing solutions, Tomori points out that, “I don’t believe profitability and quality have to be opposites. A well-designed, properly managed property can be profitable while still providing a good standard of accommodation. For me, sustainability also means thinking beyond the immediate sale or rental. It means considering energy efficiency, durability, maintenance costs, the needs of tenants and the long-term performance of the property.

“Affordability is also important because there is a real need for good-quality housing at different price points. As developers, we have a responsibility to create properties that people actually want to live in, while ensuring that the project remains commercially viable. If the numbers don’t work, the development won’t be sustainable; if the quality isn’t there, the investment won’t have the long-term value we are looking for.”

For Tomori she projects that the industry is going to become increasingly driven by technology, sustainability, affordability and changing lifestyles.
As Technology and AI will play a much bigger role in property sourcing, market analysis, valuation, property management and construction. Energy efficiency will also become increasingly important as investors, tenants and regulators place greater emphasis on sustainability and running costs.

But despite all the technology, she believes the fundamentals of property will remain the same: location, demand, good numbers, good management and solving a genuine housing need.