10 Lethal Mistakes For Real Estate Investors
There are many different ways to go wrong in real estate investment.
These are the top real estate investment mistakes so learn what they are before you start investing.
This will help you make a profit and not losses.
SIX REAL ESTATE MISTAKES TO AVOID
1. You plan as you are going. This is a bad mistake because you should have everything planned in advance. You should always have a plan and then put it into action on it. Not the other way around.
2. Think you can make money fast. These real estate investments take quite a bit of time to make a decent profit and to make anybody rich. If this is why you are getting into it, then it's the wrong attitude.
3. Not having a team. In this market you need a good team of people behind you. Each person would have different areas of expertise. You should include a real estate agent, appraiser, lender, home inspector, and an attorney to help with closing.
4. Paying more than the real estate is worth. If you pay more than it is worth you won't see any profits. You will most likely have a hard time when it comes to selling and renting it at a decent rate.
5. Avoiding homework. Before investing in any real estate, you should do your research and homework. Don't go into this area without having knowledge about the area. You should read up regarding the common practices and everything required in this area.
6. Avoiding diligence. This is an extremely common thing for the newer investors. You need to make sure the deal is correct along with the market conditions, as well as the market costs. Don't think that the worth of the property will go up just because you renovate it, but make sure.
Other Common Mistakes:
There are many different common mistakes first time property investment including:
ñ Miscalculating the flow of cash. If you are going to rent out the property you should make sure there is enough cash to cover maintenance. This means you need to calculate for taxes, association dues, insurance, advertising costs and how long you can afford for it to sit empty.
ñ Lowering the number of projects. Don't just settle for a single project because that's not real estate investment. Always have more than 1 project going and be on the lookout for new property.
ñ Not having alternate plans for the real estate. If the real estate is renovated and for sale, but nobody is buying it, then maybe you should have a backup plan. This includes the possibility of renting or leasing out the property instead.
ñ Misjudging the budget for renovations. Ideally when budgeting for renovations you should double the cost along with the time frame. If it can be rented out for a profit after that, then that is the best.
These are the top common mistakes made when getting into real estate investment. If you are aware of them, then there is a chance you might be able to avoid them. However, if not, then you will have to come up with a solution.