Real estate investing is a popular investment vehicle that many people just like YOU have used to obtain wealth and financial freedom. If you’ve been in the business awhile, you’re probably familiar with success stories, and there’s nothing stopping you from becoming one of them.
If you’re just starting out, it’s important to remember, though, that you’re going to make mistakes. Everyone does! Talk to any successful real estate investor and they’ll tell you the same thing. Mistakes, while unavoidable, can be minimized if you know ahead of time what to watch out for.
Here are a few common mistakes beginners make:
Bought in a Bad Location
Most of the people looking to buy or rent from you are interested in the location of the property. It doesn’t matter how beautiful the home is or how great the deal is if the property is located in the middle of nowhere.
Granted, there will always be people wanting to get away from it all. But if you want to sell quickly, purchase homes in places a good number of people want to live. You’ll have far more potential buyers that way.
You Underestimated Repair Costs
Who doesn’t love a fixer-upper? Unless you’re educated in home repair, you run the risk of underestimating the repair costs at least once during your real estate investing career. That can cost you hundreds and even thousands of dollars.
To avoid an expensive error, team up with a contractor and get their input regarding a home’s repair costs before you buy it. If you work together on every property you purchase, they may be willing to give you a free estimate, or even a discount! Relationships are important.
Letting Your Emotions Get in the Way
As a beginner, you’re likely going to be pretty enthusiastic about getting started. That enthusiasm often leads to disaster when you take the first deal that comes along and it turns out not to be a good one.
Don’t let your emotions lead you astray. When a deal comes along, and it will, let your reason guide your way. Check out the neighborhood, nearby amenities, look into repair costs (if any), the general construction quality of the home and the health of the market in that area.