Real estate investment is one of the most lucrative business you could ever think of venturing into if you really want to earn a long term income. The major problem investors do encounter in the business is their inability to master and understand the business before venturing into it which could cause a mistake that could cause a great loss in the future.
Most real estate investors around the world makes a lot of mistakes at the beginning of their business because they fail to learn the business before venturing into it. If you have a plan to participate in the real estate investment sector, I will recommend you read this post carefully so as to grab the knowledge before going into real estate investment business.
Top 10 Real Estate Investment Mistakes You Should Avoid
1. Paying much for a property: This happens regularly to many real estate investors and usually is not realized until it is too late. This is the main reason it is important to have an accurate information on the business before investing on it. If you want to avoid paying too much for a property, you have to stop having emotional attachment to the property because it can allow you to pay more.
2. Making purchase at the wrong time: In the real estate business, the moment you understand when to buy or sell is the greater opportunity for you. One great secret of success in the real estate business it that when you should buy when others are selling and sell when others are buying. This makes a lot of sense.
3. Having strong feelings and emotion for a property: This happen especially when starting out. At the start of a business, we are all anxious to make a deal even when the deal seems to be bad but we could seem like they have a lot of potential. The worse a property looks, the more money is to be made from it. At first, when learning the real estate business, your stock in trade is your desire, emotion, and enthusiasm. This of course is a good thing, for without it, you will not go further. Be cautioned, ask questions, and learn from experts who have been there before you.
4. Lack of accurate information: Knowing is better than guessing in all aspect of life. As you gain more experience, your educated guesses will become more accurate. There is no substitute for accurate information. Confirm all information before taking a final step.
5. Buying a property that requires too much renovation: Extensive renovation work does not always equate with a lot of profit. The best investment properties are the ones that require the least renovation work. Renovating can add much value to a house but it depends on how big of a project you want to take on.
6. No savings: This is very common especially among beginners. You can do all of your homework, and have accurate information, and there will still be unexpected expenses that come up. Have a back-up financial plan, just in case of any emergency.
7. Neglecting the need of home inspection: You invest a lot of time and effort into finding a potential investment. This could make or break you within a no distance time. Why is having a home inspection important?
This is a must for all real estate investors. Firstly, if the inspection uncovers more than you expected or care to handle, back out of the deal. Secondly, the inspection can help you get a lower purchasing price from the seller. If the inspection shows that the house is in sound condition, and there is a not a basis to ask for a lower price, even better. In either case, it is money well spent.
8. Underestimating the cost repair: Have a qualified contractor give you a written estimate. Even then, you may come across some surprises after you purchase the property. From the basement to the roof, don’t take anything for granted.
9. Inspecting the property before paying: This is mainly for the new investors, some people end up buying stolen properties from others at the end of the deal the real owner come back to claim his / her property leaving the investor stranded. You should note that there are scammers all over and make sure you stay away from them.
10. Starting out full time: Many people have dreams of becoming the next real estate expert. Most real estate fortune are made by people who work at it on a part-time basis. Keep the day job with the income coming in, you will need it also to obtain loans. When your real estate income exceeds your day job income, then consider going at it full time.
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