So you want to invest in the real estate market? That’s great. It could prove to be one of the best decisions you ever make – as long as you aren’t undermined by one of the worst first.
Thankfully, you can avoid some of the most common pitfalls that plague new real estate investors.
Simply Winging it
It’s one thing when the best-laid plans of mice and men go awry. It’s another when you don’t make a plan at all – and that’s an even bigger mistake. You need to make sure you plan every move and acquisition before you make it. It can take several good acquisitions and deals to build your business, but all it takes is one bad deal to undermine everything. Do your research and plan everything out before you make a move.
Trying to Do Everything Yourself
“No man is an island,” John Donne tells us, and that bit of real estate wisdom holds true here as well. Too often, people see real estate as a chance to buck their 9 to 5 jobs and get rich quickly. While there is nothing wrong with wanting to strike out on your own and make some real money, teamwork makes the dream work. You can make more money (and catch more mistakes) by hiring help.
Losing the Local Touch
As the saying goes, “all politics are local,” and the same goes for real estate. You can’t lose the common or local touch. Know what’s going on in the area you’re servicing, and make sure the people there know you.
Sometimes this means overpaying for a property. Sometimes this means underestimating expenses. Sometimes it means not properly appreciating how a property might appreciate or depreciate in value over time. All of these outcomes have one thing in common – they can give you a headache finance-wise. Keep a close eye on your finances, and make sure you don’t “over” or “under” anything.
Avoiding these issues and following these tips can help save you huge headaches when crafting your own real estate business.