Real Estate investing is not for the uninitiated. Lots of investors try to plunge into the market and they get burned more often than not. They see a good property for sale and assume that they can turn it into gold. This can happen, but usually not by luck. If you are looking to jump into real estate investing, here are some things that you should avoid!
Lack of Knowledge and Education
If you know nothing about real estate, don’t despair. There is online real estate training available. You can learn all about investing in the comfort of your home. A real estate training course such as real estate certificate of registration will provide you with basic information about things like valuation, depreciation, location, and researching the market. With these skills you can approach the market with confidence and good information.
Lack of Research
It is important to research properties and neighborhoods before you buy. Make sure you know about the schools, the shopping, the history of appreciation, the ages of the homes and the demographics of the people who live there. Simple things like a school closing or a factory coming in can greatly affect the value of real estate. Look at the properties for sale in the neighborhood, find out what they have been selling for and talk to people who live there. Your customers surely will!
Adjustable rates don’t necessarily work well with investment properties. High interest rates greatly increase the investors carrying costs. A fixed rate might be the best choice. Make sure you can afford to pay the whole cost if your investment doesn’t work out the way you hope. Always have a financial exit strategy.
Try to Do it All Alone
Don’t try to do it all alone. Put enough money in the budget of a property to get help renovating in the areas where your skills are weak, or you are slow. Good examples work you may not want to do your self are dry wall, electrical and plumbing. You want the investment in your investment to yield good things, like a strong profit.
This goes back to doing the research. Don’t fall in love with a property if the pricing isn’t right. Stick to your budget and don’t be greedy. Buy something you carry in the worst case scenario. Make sure it will appreciate with the work you plan to put in it. You don’t want the best property in a so-so neighborhood, you want less than desirable property in a great neighborhood to maximize your investment.
As for help estimating costs. Besides the mortgage, electrical, plumbing, utilities, any upgrades you plan to do need to have a budget and you need to stick to it. Don’t redecorate an investment property like it is your home. Do the minimal amount of work to make it marketable to your target audience.