First Purchase: Avoid Common Mistakes
Without the knowledge gained from experience, the first-time investor is at risk for making rookie mistakes that could lead to the failure of his investment.
The first mistake that an inexperienced investor can make in real estate investing is purchasing the wrong property. A good investment property can usually be found by looking for the worst house in the best neighborhood. But many investors fail to see the importance of researching the neighborhood before making a purchase. They narrow mindedly only look at the numbers associated with a property and fail to look forward to the sale. This can leave them in debt and with a property that they cant sell. Buyers notoriously look for good schools and a safe neighborhood before buying or renting a home. Fail to meet this need and they will likely pass your property over no matter how appealing it is aesthetically.
Another mistake that new investors make in real estate investing is being over zealous in the renovation process. In the excitement of tearing into their first project, they often agree to more changes than time or budget will allow. They mistakenly destroy existing value by tearing out structures that could be salvaged or revamped instead of being rebuilt from the ground up. These are rookie mistakes that can be avoided by seeking the advice of your contractor or a real estate investing mentor.
Running behind schedule on a real estate investing project can also cost the investor a great deal of hard-earned cash. Sometimes a new investor can get sidetracked by issues that arise along the way and forget to keep other aspects of the project running on schedule.
In the excitement of the construction phase of an investment, many first-time investors fail to see the importance of starting to market their property early. They may also ignore marketing avenues that could attract the most potential buyers in favor of saving a buck or two. Granted, advertising fees and broker commissions can eat away at your profit, but without them you may not sell your property quickly or at all. And carrying costs will cause more harm to your bottom line than a little bit of marketing will.
The perfection of any craft takes practice and the same it true when it comes to real estate investing. A first-time investor cannot expect to know everything, but he will learn it through trial and error. Even though this is true, an investor can lessen the occurrence of costly mistakes through diligent research and by adopting a mentor. If you are a new investor, do not ever underestimate the advice given to you by contractors and those that know the business. A kind word may just save you from disaster.
Related Tags: estate, investing, real, realestate investing
James Klobasa, once broke with no job and $20,000 in debt made a choice that changed his life forever. That choice was investing in Real Estate. With the founder of, The Little Building Co. you too, can learn at Real-Real Estate Investing
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