If you’re planning to own several properties as a part of your real-estate growth plan, this is the perfect time to take a pause and consider a few things. With the recession heading towards the US markets at a formidable speed, the prices of real estate are falling in the market. For those with enough liquidity and resources, this is also a good time to buy for the future. However, this can also turn into an unfortunate investment if the investors make a few real-estate mistakes.
Not only are these very common, but also extremely prevalent among those attempting to maximize their capital through rental income. In this blog, we will address 5 mistakes real estate investors need to avoid to make better decisions this year.
Not having an investment plan, to begin with:
Several investors buy a bunch of properties to rent out, only to realize that they can’t get the price they want. Or worse, your liquidity gets locked in at a time when you need cash urgently.
There are several reasons for this, but one is not planning well enough. If you wish to have security over your properties while not going broke, take an expert’s help to sort your finances and make the appropriate call.
Not taking time to research:
This is a cardinal error made on part of investors who think they know properties well because they are locals. However, doing the due diligence is a bare minimum procedure to ensure that your investment is safe.
For instance, looking at a property’s history and getting it checked for valuation. Next, running a background check on your tenants before renting your property out will also be valuable research to ensure you’re on the right side of the law.
Wanting to do it all alone:
Thinking that your involvement in purchasing, maintaining, and renting a property or several on your own means more money? Think again!
As an investor, your most precious resource is time, and by substituting it for delegation, you’re losing out on the time value of money that could have been spent making more productive investment decisions.
Instead, employ the help of a real estate expert to handle the renting, maintenance, and other such tasks. As an agency, they have specialists who do this all day and can give you all the necessary updates.
Choosing poor financing options:
We all have been in a place where the loan rates seemed too attractive to be true. However, there are several caveats that it may include in the fine print that can come back to bite you in the future. The best advice would be to manage your down payment well and get a loan from a reputed lender.
Ignoring the future tenant’s requirements:
When preparing your home for possession by a tenant, there needs to be due consideration of the amenities provided. If you refuse to make modifications and renovations that suit today’s tenants, you won’t get the price you wish for.
In short, doing your homework and being vigilant about your property investments can take you a long way. If you don’t have the time to be constantly around the property, hire professional real estate managers to do it for you. It will serve you better!