If you are ready to make your first real estate investment, you want to be sure you have all the information you need to make an informed decision.
Here are four mistakes to avoid on the path to success in real estate investing.
1. Failing to develop a plan
Making a plan is the first step toward your goal of investing in real estate. It is tempting to jump into a hot market, but you need a strategy. What kind of property are you interested in, a condo, a multi-family apartment building, a vacation rental? You also need to know what to do if the market declines or your prediction turns out to be incorrect.
2. Skimping on due diligence
A great amount of research is essential before investing in real estate. Study the market. Conduct a thorough study of neighborhoods, comparables and resale value of properties.
3. Avoiding budget preparation and maintenance
If you are a first-time investor, it is easy to give in to the excitement of making a deal. Stick to the budget you have in mind to avoid overspending or becoming immersed in a bidding war. Remember to include closing costs, carrying costs and agent fees in your budget.
4. Neglecting to form the right team
You should not consider investing in real estate without first putting together a team of professionals, people who have experience and who can provide the kind of guidance you need. Consider assembling a team that includes a realtor, an insurance agent, a home inspector, a mortgage broker, and, of course, an attorney who can offer advice and ensure that you avoid making any legal missteps.