4 Huge Real Estate Investment Mistakes To Avoid

| February 26, 2015 | 0 Comments

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There is big money to be made in real estate. Most financial commentators will explain that the real estate bubble burst in 2007. This much is true, and house prices suffered over the last five to seven years. However, things are beginning to turn round. House prices are thriving again and we are emerging into a seller’s market once again. It makes perfect sense to begin thinking about a new real estate strategy. Just remember, there are plenty of pitfalls in this market. Many people have lost their way, and lost their life savings in the process. Avoid these 5 big mistakes with your next project.

  1. Failing to research thoroughly

Good real estate investment is all about knowing your market. That means researching and watching the housing market in general. Know whether it is rising or in decline and make decisions based on that. More importantly, research the area in which you are buying. There are so many location variables to consider and a wrong turn could be a costly mistake. The biggest mistake we see is buying property in a declining area. Look for a location on the rise. Other mistakes include buying on or near a floodplain or close to a construction site.

  1. Bad mortgage and finance

In the last ten years we have seen the rise of poor quality mortgages. These were granting large sums of money with wild agreements that made repayments hard. Never buy more house than you can afford. This is a sure fire way to lead you to bankruptcy. Mortgage default experts at www.roachlawfirm.com tell us that more and more people are struggling to pay. If you find yourself in this position, lenders will move forward with foreclosure and evictions. Only take a mortgage that you can afford with a reputable bank.

  1. Failing to play the long game

Like all the best investments, there are no quick wins in real estate. It is not a get-rich-quick scheme. The money is made as the market grows. That takes time and as a real estate investor you should know and respect that. Trying to make a quick buck doesn’t work. You may make a small profit over the course of a year. However, the sheer costs involved in moving (fees, and tax) will render this pointless. Choose investments for the long term and play the long game.

  1. Overpaying

Most successful real estate investors tell us the same thing. Their money is made when they buy, not when they sell. There is very little you can do when it comes to selling. You are at the mercy of market forces and the offers that come to you. It is in your power to buy at the lowest possible price however, and this is where you should take advantage. Never pay over the odds for a property thinking you’ll make the difference back when you sell. This is a fool’s game! Always buy low.

If you make all the right decisions in the real estate market, you stand to make a killing. Unfortunately there are a lot of traps and pitfalls on the way. Make sure you follow this advice and avoid these four huge mistakes!

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Category: Home Loan

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