How To Start Investing In Real Estate Like An Expert
As you may know, investing is a skill anybody can learn. And as with most skills, the more
experience you have, the easier it becomes to grow successful.
But that doesn’t mean you need to withstand years of trial and error before you can start
earning significant income from your investments.
The truth is, you can (and probably will) earn substantial profits even as a new investor by
simply taking the time to learn from others’ experiences.
6 Common Mistakes To Avoid As A New Investor
1. Underestimating Your Total Expenses
One of the biggest blunders new investors often make is spending too much of their budget too
soon— even if the home you’re investing in isn’t considered a fixer-upper, you’ll still need to
have working capital after making your down payment in order to generate a return.
Remember, even if you own your rental property outright, there are monthly operating expenses
(i.e., utilities, taxes, property management, etc.) you’ll need to account for.
Conversely, if your goal is to flip the property, you’ll need to be able to cover expenses for labor
and materials—not to mention, unexpected projects that may arise before you list the home. As
a new investor, you can never be too prepared!
2. Buying A Property Without Seeing It First
Surprisingly, even investors who have years of experience still make the mistake of submitting
an offer on a home without even having visited the premises.
Regardless of how attractive the listing photos online may be, never make any assumptions
about a property until you’ve had the opportunity to schedule a walk through and see it for
yourself. In fact, as an investor, it’s not a bad idea to ask a trustworthy contractor or building
inspector to look at the home before you make an offer—the last thing you need is to tie up your
funds in a property that requires more time and money than you can afford before it can be
rented out or sold.
3. Foregoing A Home Inspection
There’s no reason to make yourself vulnerable to unexpected expenses that could eat into
profits. A good home inspector knows how to look for potential issues you may not notice,
which gives you a good idea of just how much work a property needs.
If you haven’t done so already, find out the names and contact information for reliable home
inspectors in your area. Other local investors and real estate agents can probably offer great
4. Forgetting To Think About Your Ideal Buyer/ Renter
Always base your decisions on the market’s demands. From making cosmetic upgrades to
staging and setting a listing price, the goal should always be to make the property look and feel
like the perfect home. Check out comparable listings in the area to see what price points and
aesthetics appeal most to local buyers or renters.
Be conscious of any potential savings you can take advantage of—if it’s not necessary to
splurge on pricey materials like high-end flooring, lighting, or countertops, save the extra money
and go with affordable options instead.
5. Renting Out Property Without First Understanding Local Landlord-Tenant Laws
Owning a rental property is easier said than done— before jumping into this major commitment,
make sure you understand what to expect. Landlord-tenant laws vary somewhat from one
location to the next, so keep this in mind as you begin your research.
6. Trying To Sell As A FSBO Listing
Selling your house without a Realtor may sound like a great way to increase profits. In reality,
though, listing as FSBO typically does more harm than good, and you’ll have enough on your
plate as it is. Unless you’re already a licensed Realtor, the chances of selling or renting the
home in a timely manner and at the right price truly aren’t in your favor.
Instead, check out brokerages in your neighborhood to find an experienced real estate agent
you can work with for all your investment properties.
Start Investing In Real Estate Like A Pro!
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