Real estate is seen as a great opportunity to reap huge benefits by investing in it.
Even though there are many investment options, still millions around the World consider it as one of the safest options.
The value of the real estate property build over time and also acts as a profitable option for renting or leasing. In either scenario, an individual is hugely benefited by a real estate investment.
However, sometimes investing in real estate can go completely wrong that would lead to huge losses for the investor.
In order to make the most of your investment, it is important to take a calculated decision that would negate the possibility of any mistakes. In this post, I am going to showcase a few of the missteps that an investor needs to avoid while investing in real estate.
No or Minimal Research
Lack of research while investing in real estate is a common mistake that most of the investors commit. Real estate investment should be seen no different than buying a brand new car. We often compare the different models of the cars that are available in our budget. Purchasing a property is no different and seeing the magnitude of investment it demands even more diligence.
The person must do a thorough inquiry of the area which includes the capital growth of the property, rent and the resale value which will enable him to decide that whether the property is really worth to be investing in or not. The more the research the less will be chances of committing an error.
Bad or poor financing is one of the biggest mistakes that an investor can commit. In such a situation the investor can lose huge sums of money and might also have to mortgage his assets. The possible reasons that are associated with this are the high interest rates, high monthly payments and even personal recourse. Taking a loan at a high interest rate will lead to high monthly payments. Over the due course of time, it could lead to negative cash flow due to the miss match of incomes. In a situation of personal recourse, the non payment of installments could lead to the mortgage of your assets.
Therefore, it becomes important that the financing decision which you make should be done only after doing an analysis of your present and future financial state.
Not Seeking Guidance from Experts
Most of the investors are of an opinion that all the investments that they have made in the past, investing in real estate is no different. However, it is always advised to seek the guidance of a real estate expert that knows in and out of the market. As the expert is well versed with all the trends of the market he would be the perfect person to guide you about whether or not you should invest in the property. In the end, all that matters is making the right purchase at the right time.
Emotionally Driven Decision
This is a huge mistake that is usually committed by the first time investors. A major reason for this is the huge profits that are associated with a real estate investment. Due to this a lot of initial investors flow with your emotions and get carried away. As real estate investment involves a lot of capital taking a decision that is not well researched will often lead to errors. The possibility that the investment decision will be wrong is very high. Therefore it is always advised to take assistance from a real estate expert that has already been discussed in the point above.
Adopting a Wrong Strategy
The whole process of investing in real estate is not that easy as it seems to be. There is a proper strategy that an investor needs to adapt so that he can achieve maximum profits from his investment. By strategy, it doesn’t mean that there are some predefined steps that you need to follow. It is more related to what are your long term or short term goals of making the investment. Each person has his own motive of investing. Therefore, it becomes important that you make your own investment strategy that will work well for you.
Repeating the Same Mistakes Again
There is no harm in committing an error but no learning from your mistakes and repeating the same mistakes again is not expectable. Real estate market keeps on changing year by year. This makes it even more crucial for all the investors to revamp their investment approach. Following the same old strategy won’t work and will lead to even more wrong decisions.
Investing in real estate has never been an easy job and has some sort of risks associated with it. However, all these risks can be negated or reduced by following a proper planning. An investor that is diligent enough will definitely make huge profits from the real estate market.
This post is written by David Lane. He was born and raised in Thailand. He is working as a Realtor for Thailand-property, Offering best Thai property for their clients . David is praised most often by clients for his enthusiasm, patient approach and unwavering loyalty. Apart from this , David loves to do fly fishing, sporting clays and play golf.