Real estate billionaire Andrew Carnegie once said that 90% of millionaires got their wealth through real estate investments. However, even big shots like them commit real estate investing mistakes. The difference is, they caught on early and worked hard not to repeat the same mistake.
The good news is you can too! Here are six real estate investing mistakes that you’re likely committing and how to avoid them.
1. Doing Poor Research
As there are varying types of property available for investment, real estate investors must do thorough research. This will help them identify the strengths and weaknesses of the property. Such information proves to be useful in creating a solid investment plan.
For one, knowing the property's pitfalls will help investors create a strategy to counter its effects. For instance, the house you’re looking to buy has remarkable features.
The only downside is that it’s near a fraternity house that often hosts parties. This is bad news if your target market is families.
Thanks to the early heads-up, you can counter this by shifting your target market to college students instead. In this manner, you’ll save time and money from marketing the house to the wrong audience.
2. Buying Without a Plan
Another common real estate investing mistake that most investors commit is going into a shopping frenzy when the market is hot. This results in investors acquiring properties that turn out to be poor investments.
So before investing in real estate, come up with a detailed investment plan. Enumerate the type of property that you’re willing to invest in and use it as a basis. Doing so will help you focus and prevent you from committing a shopping frenzy that you’ll regret.
3. Chasing After Big Discounts
Most new real estate investors mistake big discounts as a green light for buying. In most cases, such discounts are baits set to trick you into buying a low-valued property. Thus, instead of chasing after big discounts, you should maintain a long-term investment outlook and focus on building your property portfolio.
4. Underestimating Expenses
Real estate investors seldom fail to account for expenses needed in maintaining a real estate property. This is especially true for properties that have monthly maintenance bills. We suggest calling for an accountant to help with your finances.
5. No Exit Strategy
As most investors fail to create an investment plan, they also fail to develop an exit strategy. When deals fall through, an exit strategy will help investors minimize their losses. Thus, consult a specialist and create an exit strategy to avoid costly “cash-outs."
6. Thinking That You Can Do It Alone
Real estate investing requires a lot of work from researching to managing investments. When left to one person, this can lead to poor management resulting in great profit loss.
Team up with real estate agents, inspectors, and specialists to help you create a great real estate investment strategy. They'll also prove to be useful in identifying and sorting out red flags. All of which, can help you lessen risk and boost your profit.
Get Help in Avoiding Real Estate Investing Mistakes Today!
Real estate investing proves to be fruitful when you're able to correct real estate investing mistakes that you've committed. It also helps to exhibit great skill in property management.
If you're living in Salt Lake City, Utah, we're here for you! You can rely on us to handle the tedious job of property management. Contact us now and reap the benefits of having a reliable and competent property management team today!