There are more than 28.1 million people currently investing in the real estate market. With that being said before you begin investing it's crucial you understand mistakes that could ruin things before they've had a chance to thrive.
Property investments combine the benefits of home ownership with the flexibility of renting.
If you’re considering taking the plunge into this type of investment, here are some common property investment mistakes to avoid so you can get started on the right foot.
1. Research Your Investment Thoroughly
The first step to any good property investment strategy is thorough research. Successful real estate investing isn’t about finding the “perfect” property; it’s about finding the right property for you. The best way to do this is through research and due diligence.
Start with a thorough scan of potential properties and neighborhoods in your area. What are the current average rents in your area? What are the average property prices in your area?
What are average vacancy rates? What are average maintenance costs? Find out the local rental and resale markets and how they might affect your potential investment.
Then, do background checks on the managers and owners of the properties you are considering. Make sure they are reputable and have a good track record.
2. Don’t Dive in Head First
Many first-time property investors dive right in and buy a property without considering how they will fund the purchase. This is a common real estate market mistake, but it can be easily avoided.
Before you sign on the dotted line for that dream condo, make sure you have the funds available to cover both the down payment and the monthly mortgage repayments.
That means having a budget for your potential investment. Add up all the expenses you can expect to incur in connection with the property, from the down payment to utilities and everything in between.
Make sure you’ve enough cash in the bank to cover these expenses.
3. Be Realistic About Resale Value
If you’re planning to sell your investment property, you’ll need to be realistic about resale value and perhaps speak to a real estate investor. That means doing your research and doing some careful number-crunching.
If you’re planning to sell your investment property in the near future, you need to consider the state of the market. The last thing you want to do is sell at a loss. This means carefully considering your repair costs, as well as the general condition of the property.
In general, you want to avoid making significant and unnecessary repairs. At the same time, you don’t want to buy a property in such bad condition that you’re spending more money than you can afford to fix it up.
Common Property Investment Mistakes to Avoid
The best way to avoid the common property investment mistakes that come with being new to real estate investing is to do your research. The more you know about the process and the challenges you’ll face, the better prepared you’ll be to overcome them and succeed as a property investor.
For more help, before you make your first investments, you need to contact Blue Line Property Management.