Avoid 12 Common Mistakes Made by Novice Investors and Ensure High Rates of Return
A TWO PART SERIES
Real Estate investment has provided many investors with positive cash flow, tax benefits and satisfaction of making an impact in others lives. However, like any investment real estate has intricate nuances and market trends that when ignored can cause an investor tremendous heartache.
Unbelievably many first time investors are willing to part with their hard-earned cash without taking the time to study their investment. They rely on traditional trends and gut feelings. Before you risk your investment take the time to learn all you can about your market. by aligning yourself with the right professional you can avoid these 12 common mistakes and you’ll ensure an excellent return on your investment.
- Failure to Determine your Time Needs Cash flow, capital appreciation, tax benefits, loss of management, equity pay down and pride of ownership are just some of the things that need to be addressed before you make that investment. A service minded real estate professional can be a tremendous asset by taking the time to evaluate your needs and making sure you’ve got all your bases covered.
- Not Checking out the Seller or Sellers Agents Numbers Claims of extremely high rates of return run rampant in real estate investment. Don’t get caught up in the excitement. – check everything: rents, payment history, taxes, expenses, deposits, future modifications…everything. Make sure yu have the right agent… it’s like having a good insurance policy against overlooking all the seemingly insignificant but very important details.
- Forgetting You’re Buying A Business – owing investment property caries with it great potential for creating wealth and…some potentially difficult decisions. Evictions, re-investment in the property, and time management all need careful consideration. this is not a “hands-off” business.
- Avoid Negative Cash Flow – Property that eats cash every month can drain your working capital. This can create stress, frustration and become quite painful. Predicting constant appreciation is extremely difficult if not impossible for the unseasoned investor. A strain on your cash flow may cause you to sell the investment before the benefits of ownership are ever realized.
- Failing to Have Adequate Insurance – Investment property brings liability. Tenants, cars, parking lots, cleaning facilities, property liability – the list is quite extensive. Adequate insurance coverage is an absolute must! Be sure to consult with an insurance professional and protect your hard-earned assets.
- Inspect, Approve, and Confirm All Documents – The list of documents that need to pe proofed and be overwhelming to the first time investor. Building permits, zoning laws, rental and lease applications, health licenses, laundry leases, underlying loan documents, CC&R’s, by – laws, title policies, mineral leases, inspection reports, purchase contracts, insurance… don’t attempt to do it alone. The right professional can remove most of the stress and bring the transaction to a conclusion smoothly.
THE SECOND SERIES WILL FOLLOW IN LESS THAN A WEEK FROM TODAY.
In the meantime if you have any questions or concerns please email me or call.
