6 Mistakes to Avoid When Investing in Real Estate
Just like any extremely rewarding capitalistic venture, real estate investing can be your best friend or your worst enemy. When catered to and paid the proper amount of attention and dedication, your investments can provide you a life beyond your wildest dreams. However, conversely, if you aren’t on the up and up with your ‘game’ as they say, then you could be in for a long ride. We have put together a list of six very important mistakes to avoid when investing in real estate in an effort to get you started on the right foot.
Off-the-hip Planning
One of the worst mistakes you can make is not having a proper plan in place before making any real moves in your potential investment. It is extremely important to create the plan first then go out and find the house or property that fits within that plan. All too often people get lost in the potential glamour of what they consider the perfect property or opportunity. It can only be perfect if it fits your plan.
Thinking it Happens Overnight
It takes lots of researching, learning, and planning to make a successful real estate investor. Some people may find it possible to get a couple of quick returns and make a little money here or there, but for those of us that wish to become large-scale investors and really provide for our (or our family’s) future, this takes focus and most importantly time. The best thing you can do for your investment future is to spend the time to learn and plan.
Not Getting Best Deals Possible
This goes along with research and taking the time to really understand what it is you’re trying to accomplish. With the correct plan you will know exactly what kind of deal you are seeking and what you need to do to obtain it. Never settle for anything outside of your plan provided that you’ve done the diligence and have made it solid. Learning about rates and various forms of leverage can go a long way in helping you locate the deal that fits in your plan.
Not Researching Thoroughly
We’ve touched on it over and over, you can never research enough. Understanding of the current market trends and rates can mean the difference between getting a life changing opportunity and wasting thousands if not hundreds of thousands of dollars. Also, not having a full understanding of the area in which you are trying to invest can often times prove to be detrimental. You want to make sure you know your plan, know your market, and know your area.
Not Running All the Numbers
Don’t be scared to either consult an accountant or hire one to ensure that the numbers are always correct. We have spoken over and over again in this post about how important researching and having a plan is, and one of the biggest parts of that plan is making sure that all the numbers, “add up”.
Not Having a Plan B
Real estate investing isn’t always sunshine and rainbows. There are some of the highest highs, but that is coupled at times with the lowest of lows. Part of your plan should always be a plan “B”. It would be great if all we had to worry about was how to look upward or forward, but realistically we must be prepared for when things do not go as planned.
