There’s no greater satisfaction than owning real estate and watching that money roll in every month.
It may take a while to reach that point, which is why every great real estate investor needs to know about the potential mistakes you can make during the investment period. Here are top 5 mistakes every investor needs to know before getting into real estate.
1) Think big
You might feel comfortable buying real estate in an area you know well, such as the town or city you live in.
Doing so might sound like a smart move, but in the world of real estate, a narrow outlook on things is really going to limit your possibilities.
Looking at other places offers many more opportunities for investment, and if you play your cards right, at cheaper prices too.
You don’t know what’s out there unless you look, and you just might be surprised at what you find.
2) Don’t think you can avoid paying insurance
It may be wise to take risks when looking where to invest, but insurance is the one thing you don’t want to take any chances on.
Just because insurance only really matters when things go wrong doesn’t mean things can’t or won’t go wrong. No one wants to be the person that simply didn’t buy insurance because they thought they didn’t need it.
The internet has made it easier than ever to get the best deals on your insurance. Price comparison websites are in abundance these days, so you really don’t have any excuse for not getting the best offers on insurance available.
3) Always have a backup plan
As an investor, your main source of income is likely to be from rent when you let out your investment property. However, you shouldn’t solely rely on monthly rent as your only option when it comes to paying for the necessities.
All sorts of problems can arise when renting, which means you should never assume you will get a fixed amount of rent every month. From a costly repair to financial problems with the renter themselves, it’s always smart to have a backup source of money.
For maximum protection, always try to have at least 3 months’ worth of payments available should the need arise.
4) Keep the tenant in mind
You may own the house, but its always important to think about the kind of people who will be renting your property. From an investment perspective, this means you should seek out properties that the people in the area will want to live in, not a property that you yourself want to live in.
A bit of research beforehand can go a long way. While the internet can help you find out popular property homes in the area, speaking to a local property manager is the best way to find out exactly what’s popular with renters at the moment.
5) Don’t do it all yourself
Investing in real estate requires a lot of time and effort, and sometimes that can prove too much even for an experienced investor.
Property managers are there to help handle some of that important workload. From advertising, paperwork to working with complicated tenants, their job is to ensure that you get the best investment on your property possible.
Doing it alone could mean you miss out the necessary experience and skills that a property manager can bring. Sure, they may cost you, but the overall saving you could make by getting that killer property could easily outweigh the initial costs.
Be the best investor you can be
Investing in properties can leave you with a healthy income if you play your cards right. Bear our tips in mind, and you too can reap the benefits that being a property investor brings.
The information and links provided on this website are for general information only and should not be taken as constituting professional advice. This information does not take into account the financial situation or particular needs of individual readers. Before making any decisions about matters discussed on this website, you should consider whether it is suitable for you in light of your own circumstances, and seek appropriate advice.