5 Most Common Mistakes by Real Estate Investors
If youíre a new real estate investor or experienced you will need to read this article. This article explains the most common mistakes made by investors.
If I read an article like this before I brought my Atlanta investment, I would have saved a lot of money and time.† In this business or I guess any business, people will take advantage of you. †They feel as if youíre what I like to say a new jack.† This business can be very profitable if youíre educated about some common pitfalls. In fact, thereís tons of free information for anybody to look up on the internet and research themselves. Below is a list of the most common mistakes made by real estate investors.
∑†††††††† Didnít Do Any Research- The smartest thing to do before buying an investment property is to find out the average number of days- houses sit on the market in that particular area. This will give you a good idea of how fast your property will sell if itís a flip. Itís always good to make friends with a real estate agent. Agents can give you this information. Donít forget to drive past your comps, and get a feel for what the properties look like compared to yours.
∑†††††††† Too Many Upgrades- If you plan to use the property as a rental then thereís no need to replace a whole lot. Generally the only money you should be putting into a buy and hold is carpet, paint, and any general repairs the property may need. When a homebuyer buys a home they love to see everything brand new and never touched. If you install these new items to soon then they will not seem so new when itís time to sell. The worn property will not entice your buyer like it should. Wait until itís time to sell then put in the new faucets, updated light fixtures, and new outside paint.
∑†††††††† Paying Too Much For Rehab- Never go with the first repair estimate you get from a contractor. You should have at least 3 repair estimates from 3 different contractors. Pick the one who seems most qualified. Cheaper is not always better in this case. Try to find contractors that are familiar with investment property. They normally will be able to tell you what needs to be done to get the property in rent ready condition, or re-sell condition.
∑†††††††† Didnít Evaluate the Neighborhood- It is very important to evaluate the neighborhood that the investment property is located in. I say there are two types of neighborhoods. The neighborhood that you rent section 8 property, and the neighborhood that is considered bread and butter. These bread and butter neighborhoods are the ones that we all want to raise our families in. It is crucial you realize there are one or the other and nothing in between. Trying to sell a house in a section 8 neighborhood can be 10 xís harder than in a bread and butter neighborhood. Take notice of how people take care of their property. Also look for an abundant amount of [For Rent Signs]. Call the signs, and get a general idea of what property is renting for in that area.
∑†††††††† Didnít Make a Plane- Be sure to have plan A, B, C, and D if able. Get a clear understanding of what you will do if you canít rent your investment property in 1 month, 2 months, or 6 months. If you want to flip be sure to have a plan if your investment property doesnít sale as quick as you thought it would. In addition, establish your plan and stick to it. Itís o.k. to change the plans, but donít ever doubt yourself.
These are some of the most common mistakes that lead to failure.† If you can avoid at least one of these mistakes then you have served yourself great justice. Many will fall victim, but with knowledge and dedication comes reward.† Knowledge is very important while in this line of work.† If you donít take the time to educate yourself- I guarantee you will waste a lot of time and money. Many people experimenting with real estate will probably fail simply because they havenít done their homework.
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ABOUT THE AUTHOR
http://www.AssetPropertiesATL.com/cheapproperty.html Khalid Johnson is a real estate investor out of Atlanta,GA. My company sells investment properties all over Atlanta with tons of equity. Visit my web site above for a FREE REPORT "How To Buy Wholesale Properties Without Any Risk".