Real estate investing is one of the sure ways to financial freedom. It’s a famous saying that 90 percent of the world millionaires got their wealth through real estate. As it’s a sure-fire way to build wealth, it also can be risky and has even lead to the demise of many careless people. So if you want to invest in real estate, here are things every beginner property investor should avoid.
Don’t Go it Alone
Real estate investing is evolving every day, so never make the mistake of making decisions on your own. Like the famous saying “Human being is a social animal and can only survive by social interaction.” No one is an island of knowledge—everybody needs to help one way or another.
Surround yourself with like-minded people. Work with professionals—Accountants, Appraisers, Lenders, property strategists, and be sure to get yourself a mentor.
Don't Forget to Plan
“If you fail to plan, then you're planning to fail.” What’s your investment goal? How do you want to execute your plan? What’s the road map? What’s your investment strategy? These are some of the questions beginner investors should ask themselves before embarking on an investment journey. You surely don’t want to put the cart before the horse, So learn to plan!
Don't Attempt Fix and Flips
For beginner real estate investors, fix-and-flip should be avoided. Why? Investing in the fix-and-flip niche is risky. Unlike the rental investment strategy, the fix-and-flip investment strategy requires a smart and sharp mind for calculation of the after repair value (ARV). Also, this strategy is easily affected by economic fundamentals like demographics, media, employment, etc. So as a beginner property investor, you should start by investing in a rental property.
Don't Give Up
Like Lucius Seneca said, “It is the rough road that leads to the heights of greatness.” As a beginner real estate investor, the truth is that real estate investing is tough. There are highs and lows. There are times when things won’t go as you plan; and there are times when you’d be fortunate and make more than what you predicted. So as you are starting, understand that it takes time to make it. So if you’re having a hard time in your endeavor, remember that it’s just for a while. And the hard time will surely pass!
Don't Overlook Local Data on Investments
Unlike the stock market, in which analysis from any analyst can be used to make investment decisions, real estate is different. In real estate, decisions are made based largely on the local market. Local fundamentals (like demographics, unemployment rates, local companies, social amenities, population, demand, and supply) have a significant impact on decision making. Two properties beside each other can have different returns on investment. So, as a beginner investor, never make the mistake of assuming the final result from afar.
Emmanuel is an enthusiastic freelance writer with expertise in real estate, mortgages, business and SaaS. His passion for real estate and property investing inspired him to create content that breaks down industry jargon and connect the dots between emerging technologies and property investing. When not writing, he is either taking a nap or working out. Contact him on proptechwriter.com.