So, are you planning to invest in real estate? If the answer is yes, this is the only blog you need to read in 2023!
There’s no investment as dynamic as the real estate investment. But, you need some wise advice on precautions before entering the market of real estate investment. Here we have listed the top mistakes that you need to avoid to succeed as a real estate investor.
1- Invest according to your personality –
We make an investment to live our dream life not to create a stressful second job. So, you need to understand your personality type before making an investment. Some of us prefer a steady flow of cash while the others are adventurous; decide which category you belong to and choose the investment option accordingly. If you are someone who wants the benefit without taking the pains you can join some real estate investment clubs.
2- Don’t try to build a one-man army –
There’s nothing bad in knowing and doing things on your own. But, don’t take this self-dependency to the level that it starts hurting you. If you plan to invest in just one or two property it is okay to manage them yourself. But, if you are taking your investment adventure to the next level don’t forget to hire someone for managing the existing property and do what you can do best – investing in new properties!
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3- Utilize the expertise of professionals –
Even if you think you can do it yourself sometimes it’s better to hire professional help. Take for example the property inspectors; you should always hire a professional property inspector to inspect a property before buying it. These professionals are specially trained for that particular work. So, they can inspect the property better than you. Also, get the appraisal done by a professional to save yourself from paying more for a less deserving property.
4- Never be in a rush –
This is a rule of thumb for any investment. Don’t be impatient to buy or sell a property just by looking the current phase of the market. Even if the market is growing slowly or has completely stagnated don’t get in a rush to sell off your property at the lower than its purchase price. Experts say that when you have invested in real estate you’ll earn in the bull as well as the bearish phase but if you turn your investment into a pig it will get slaughtered.
5- Don’t spend all your cash in one single house –
We all want to live a debt-free life and theoretically, it is the best course of action. But when you are ready to enter top to toe in the real estate market you’ll need to change your way of thinking slightly. Use a fraction of your cash to pay for the property, and, let the rest amount be paid from the mortgage. The money you’ll receive from your renters would be sufficient to pay off the mortgage and bring you profit as well. You can use your cash for buying several properties by paying a fraction rather than wasting the whole cash on one property. More the numbers of units more secure are your investments.
6- Don’t over-plan and over-think –
It is good to think from all angles before making an investment decision. But, if keep on thinking and overthinking on the same matter you will only waste your time and maybe lose some good opportunities. You should make a plan of action before invading the real estate market but waste years in making the plan. There is nothing called a ‘full-proof plan’ in the investment market. Even the biggest names in the market have reached that place after making lots of mistakes. What creates the difference between the losers and the winners is their course of action after the mistake – Winners learn from their mistake and walk ahead whereas losers either quit the market or keep on repeating the same mistake.
7- Trust people but not blindly –
This applies to all the aspects of real estate investment. When a dealer is trying to convince you about a property show trust in him but get the property verified by a professional inspector. When you are hiring a contractor for rehabbing the bought property believe in the promises of the contractor. But, don’t forget to verify his credibility in the market with the previous customers. When you are handing over your property to a renter believe his claims of paying the rent on time. But, don’t forget to get his income status and credit rating verified independently. In this case, also check for any previous criminal record with the police.
Avoid these seven common and big mistakes of real estate and your invested money will remain safe.