Top 4 mistakes to avoid when investing in real estate
- You’ve heard it before and you’ll hear it again, the number one mistake anyone investing in real estate can make is lack of research. Without knowing your market you are unable to properly account for your investment. In real estate, it is important to ask a lot of questions and make sure you understand all the answers. Never make a real estate purchase without the confidence that you could answer someone else’s questions about the property.
- We are all aware of the housing bubble that burst and left the market in disarray in 2007. One of the factors that played into this crash was the vast amount of purchasers receiving lousy financial advice combined with inflated mortgage options. Unfortunately, some of these companies and businesses are still around today and are still offering lousy mortgage options to those purchases that are uninformed. On the flip side, since the market crash there have also been a handful of qualified companies offering new mortgage options for beginning investors. If you want to avoid making a mistake with your financing it’s smart to research your mortgage lender and read reviews from satisfied customers that have actual experience working with one of these lenders.
- Don’t believe that you have to do it all by yourself. There are so many resources available to anyone interested in investing in real estate that by doing it all by yourself may be cheating you out of more and possibly better options and opportunities. Allow the experts to help you where you need help and use your fellow investors as your networking safety net. Make sure you have somebody you can call when you have questions. By utilizing all the resources available you’ll be able to positively grow your portfolio in a smarter and uniformed way.
- The last mistake we will warn everyone to avoid is underestimating how much it will cost to renovate, maintain, or pay the fees necessary to turn your investment into a cash-flow investment. Creating a budget is an absolute necessity when it comes to investing in real estate. Be sure to get every property inspected by a professional before you purchase a property to check the foundation, electrical, and plumbing. Lastly, it is always safe to set aside some of your budget for the unexpected. If you plan for the unexpected you’ll avoid one of the biggest pitfalls beginner investors make.