Real estate still remains the most popular investment by investors across the divide. While property markets have recently experienced some turbulence, the seasoned entrepreneur appreciates that this is a risk worth taking, especially when the asset you own provides an invaluable service to the society.
Whether you invest in a second home in Costa Rica or rental in NYC, you have control of your investment as opposed to the stock market where things are out of your hands. Real estate also guarantees a constant stream of cash, tax benefits and provides a hedge against inflation. It is no wonder most people consider real estate the strongest investment option.
If you are looking for real estate for sale in any market, it is advisable to be cautious because this market is riddled with scams. Many investors have lost money by rushing to buy property without carrying out due diligence. The fact that this is among the most sought after investments makes it easy to lure unsuspecting buyers. As such, you should be forewarned in order to avoid this pitfall.
Below are some common mistakes that many real estate investors, especially beginners in the industry, make. By learning about them, you will be better placed to make the right move and buy property that guarantees the highest ROI.
- Lack of Research
This is the greatest blunder you can ever make as a potential real estate investor. If you don’t have an idea about a particular property market, don’t throw your money into it. Take time to learn about market trends, reasons the owner is selling,permit and ordnance issues, prices, recent sales, and expected ROI among other things.
- Failure to Use an Agent
This is another common mistake which buyers make, especially now that the internet seems to have all answers. You have to appreciate that a real estate agent has the expertise and resources to make the real estate transaction seamless. They know the market better than you and they are ready to use this expertise to help you.
- Failure to Consider Real Estate a Business
Of course real estate is a good investment but if you approach the same with the hope of recouping your money instantly, you are in for disappointment. In your mind, take a real estate purchase as a business that requires a lot of input and not just the capital.
- Failure to Get Pre-Approved
The real estate market is viciously competitive, especially when a hot property is involved. The last thing you want is to see a good property and lose out because you have not been pre-approved. With a pre-approval, you know which properties you can afford, which puts you at a vantage position in the negotiations.
- Not Considering the Long-Term Costs
Now that foreclosures have become a hot cake in real estate, shouldn’t you also hop onto the bandwagon and buy one? Well, you should always make real estate decisions considering what you need to do after the purchase. The costs that come with some types of properties can drain you before you make a single coin.
By avoiding these and other real estate mistakes, you will be well positioned to make the best investment decision.
Sam Ruud is a property market consultant with over 19 years’ experience in the industry. He also runs a listing for real estate for sale in Jackson, WY. Sam lives with his family in the city. Visit his blog here for more information.