The real estate niche can be erratic and ruthless, and new property investors may feel like they’re facing an uphill battle when they take their first steps into the market.
It’s certainly possible to reap some big returns from investing in real estate, but if you think it’s going to be easy then you’re gravely mistaken!
Avoid the following rookie mistakes, and you’ll up your chances of a more stable portfolio…
Neglecting Research
Before you buy a car, a television, or any other major purchase, you’ll naturally compare the features and prices of many different models, and ask a lot of detailed questions before you reach a decision.
The diligence you exercise when it comes to buying property needs to be even more thorough. You’re going to need to carry out different kinds of research for different types of home.
For example, if you’re buying older homes and intending to flip them, you may need to hire in some like Allcott Associates.
If you’re buying commercial property to sell to commercial buyers, it can be a very smart move to research new small businesses in the area.
Fail to research the area and the property itself, and it can come back to bite you in a very severe way.
Getting Poor Financing
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Though the housing situation has stabilised significantly since the last recession, there are still a wide range of mortgage options which will be available to you.
The idea behind some of these mortgages is allowing new buyers to get into homes they wouldn’t have been able to access through conventional agreements.
Although adjustable and variable loans may seem like an attractive option on the surface, real estate investors who go with these often wind up getting burned later when interest rates shoot up.
Before you settle on any financing option, make sure you have enough financial flexibility to keep up with payments if and when interest rates rise.
Alternatively, you should set out some kind of plan B that will allow you to switch to a conventional, fixed-rate mortgage further down the line. This can make all the difference when you finally come to sell the home.
Jumping In Alone
It’s a huge mistake for any newbie real estate investor, or an experienced one for that matter, to think that they know everything there is to know about the process, and that they can close any given real estate transaction relying on their own smarts.
Things may seem pretty simple at the stage you’re at now, but the process may not go so smoothly if the market takes a sharp downturn.
When you’re looking to take your first steps into the market, you should try to leverage every single resource you have available. As a minimum, get a sharp agent, a reputable surveyor, and an experienced insurance representative.
Assembling this team will ensure you’re alerted straight away to any kind of flaws in the property or buying process.
Steer clear of these rookie mistakes, and you’ll be able to assure a smooth start in real estate investing.
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