Here are seven mistakes real estate investors should avoid.
There’s no doubt about it—the market has shifted. Interest rates are up, and there’s news of an incoming recession. If you want to make this shifting market work to your advantage, there are a few things you should avoid. Here are some of the most common pitfalls investors make when buying investment properties:
1. Not starting with your real estate investment plans. Many would-be buyers and sellers overanalyze the market numbers but never make their real estate move, missing a great opportunity as a result. Sometimes the best way to learn is by doing.
2. Making an investment based on emotions. Don’t make a real estate decision based on emotions. You need to look at the numbers, and decide if it makes sense. One of the worst things you can do is to buy or sell based on your fear of missing out.
3. Underestimating your expenses. Now that the cost of goods and services are increasing, it would be wise to add 20% to 30% to whatever bid you get to ensure that you’re fully covered.
4. You’re too cheap. Sometimes it’s tempting to cut corners to save on costs, but then it comes back as a bigger problem later. If necessary, spend the extra money to save yourself from future headaches.
5. You’re not cheap enough. You have to think as an investor and not as a homeowner. A sink you’d like to add to the property may not always spell out more return of investment.
6. Not looking into other areas of the state. Home appreciation in some states may not be great, but their rents are consistent and can potentially offer you a stable cash flow. Learn what your goals are, and then you can start looking into other markets.
7. Doing everything by yourself. Don’t try to do everything by yourself. Whether you want to invest locally or out of the area, we can help you make the best real estate investment decision. All the best investors out there have an amazing team behind them.
If you need more help with your real estate investment or have any related questions, reach out to us by giving us a call or sending an email. We’re here to help!