Investing in real estate most likely won’t produce the get-rich-quick results promised by many a late-night infomercial. But for investors willing to do some homework, make a good purchase and properly manage a piece of property, the rewards can be substantial. There are some common mistakes made in real estate investing that almost every novice makes. These pitfalls of real estate investing can easily be avoided. You need to know these mistakes or it could cost you a fortune. Paying attention to the smallest detail could net even more profits than you could imagine.
The first mistake you must not make is not formulating a plan. Every successful business has started with a marketing plan. They recognized the marketing niche which needed filled and offered the service to fill the void. This is what you must do to avoid the pitfalls of real estate investing. The marketing plan is easy to write. You must write it down. This gives you a visual of what you are doing. When you seem to get lost in the transactions, you can refer to this plan and get back on track. The marketing plan should include how many deals you want to process. You will want to list how much money you want to make. You will also want to put down how long this is going to take. Setting goals and sticking to them will make it easier to realize your real estate dreams.
Another pitfall of real estate investing is not knowing the market. You must know what areas are growing and which ones are becoming depressed. The last thing you want is to buy the dream home in an area where no one wants to live. This can be a costly mistake. Getting to know your market means knowing the price you can buy at and sell for. This is one thing that is a must when investing in real estate. Expecting every deal to be like the last one is a mistake many novice investors make. They get frustrated and disgusted when the second or third deal does not go as smoothly as the first. Some times the first deal is harder to put together than any other. Each transaction is going to be different. The home is different. The sellers want something different. You may have to use a lender or you may not. Each deal should be treated as though it were your first. This way you pay close attention to every detail and the risk of making a mistake is lower.
One of the biggest pitfalls in real estate investing is not properly estimating the property. The home you are looking at must be able to yield a profit. It does not matter if the neighborhood is great or that you would love to own that house. It must make sense financially to buy the property. If it is not a sound investment, do not do it. There may be a snag in the deal where the net profit is jeopardized. If this happens, check to make sure you are still going to gain. At any time, you can walk out of the deal should it turn sour. Do not try to salvage a sinking ship. Let someone else do that. Cut your losses before it is too late. Avoiding these common pitfalls when investing in real estate can save you headaches and finances. Remember to set up a marketing plan, know your market, research the property, and bail if the deal goes bad. If you remember these points you should succeed in the real estate investment market.
Article Tags: estate, investing, make
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Tags: Costly Mistake, Dream Home, Estate Dreams, First Mistake, Fortune, Homework, Infomercial, Investing In Real Estate, Kim Lee, Late Night, Marketing Plan, Niche, Novice Investors, Paying Attention, Pitfall, Pitfalls, Real Estate Investing, Rewards, Setting Goals, Successful Business
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Pitfalls Of Real Estate Investing
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Submitted By: Kim Lee  |
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Investing in real estate most likely won’t produce the get-rich-quick results promised by many a late-night infomercial. But for investors willing to do some homework, make a good purchase and properly manage a piece of property, the rewards can be substantial. There are some common mistakes made in real estate investing that almost every novice makes. These pitfalls of real estate investing can easily be avoided. You need to know these mistakes or it could cost you a fortune. Paying attention to the smallest detail could net even more profits than you could imagine.
The first mistake you must not make is not formulating a plan. Every successful business has started with a marketing plan. They recognized the marketing niche which needed filled and offered the service to fill the void. This is what you must do to avoid the pitfalls of real estate investing. The marketing plan is easy to write. You must write it down. This gives you a visual of what you are doing. When you seem to get lost in the transactions, you can refer to this plan and get back on track. The marketing plan should include how many deals you want to process. You will want to list how much money you want to make. You will also want to put down how long this is going to take. Setting goals and sticking to them will make it easier to realize your real estate dreams.
Another pitfall of real estate investing is not knowing the market. You must know what areas are growing and which ones are becoming depressed. The last thing you want is to buy the dream home in an area where no one wants to live. This can be a costly mistake. Getting to know your market means knowing the price you can buy at and sell for. This is one thing that is a must when investing in real estate. Expecting every deal to be like the last one is a mistake many novice investors make. They get frustrated and disgusted when the second or third deal does not go as smoothly as the first. Some times the first deal is harder to put together than any other. Each transaction is going to be different. The home is different. The sellers want something different. You may have to use a lender or you may not. Each deal should be treated as though it were your first. This way you pay close attention to every detail and the risk of making a mistake is lower.
One of the biggest pitfalls in real estate investing is not properly estimating the property. The home you are looking at must be able to yield a profit. It does not matter if the neighborhood is great or that you would love to own that house. It must make sense financially to buy the property. If it is not a sound investment, do not do it. There may be a snag in the deal where the net profit is jeopardized. If this happens, check to make sure you are still going to gain. At any time, you can walk out of the deal should it turn sour. Do not try to salvage a sinking ship. Let someone else do that. Cut your losses before it is too late. Avoiding these common pitfalls when investing in real estate can save you headaches and finances. Remember to set up a marketing plan, know your market, research the property, and bail if the deal goes bad. If you remember these points you should succeed in the real estate investment market.
Article Tags: estate, investing, make
| |
Tags: Costly Mistake, Dream Home, Estate Dreams, First Mistake, Fortune, Homework, Infomercial, Investing In Real Estate, Kim Lee, Late Night, Marketing Plan, Niche, Novice Investors, Paying Attention, Pitfall, Pitfalls, Real Estate Investing, Rewards, Setting Goals, Successful Business
Recently someone emailed me from my real estate web page serving the London Ontario Canada real estate market asking for advice regarding the purchase of there first real estate investment. The next morning when I was practicing some yoga it occurred to me that successful real estate investing is very much like yoga. Both are very simple in execution and theory; however both require discipline, consistency and perseverance.
In yoga you take a relatively simple position and hold it for a long period of time to derive benefit. Likely at this point you see where I’m going with this analogy. Yes indeed real estate is quite the same. You take a position which is buying a property and hold onto that position for a sufficient period of time to derive a benefit. Sounds simple indeed! However, if you’ve tried yoga you know that it can be one of the most challenging workouts one can do. In real estate investing one can be challenged by, raising interest rates, bad tenants, vacancies, maintenance issues and perhaps most significant changing personal circumstances. You need to hold on to your position to derive a planned for or significant benefit, which in this case is significant appreciation of the property.
To derive a benefit from yoga one must have certain rules that have to be consistently followed. For example, one must plan for specific times per day or week to set aside for yoga practice. Other rules might be not to be overly fatigued, inebriated etc. for these time periods. For real estate investing setting goals is a separate issue from setting rules. In my opinion it is extremely important to do significant research so that one can realistically set certain rules as these rules will protect you from impulse buying and poor buying practices in general the least of which is one’s own greed or ambition. For example, many years ago prior to being a realtor I bought houses close to the University of Western Ontario Canada and fixed them up to rent to students. So here are my rules from this time period.
1. Identify certain geographic area based on travel time to the main campus.
2. Know market rents for this geographic area
3. Be very conversant with market value of properties in this geographic area and know cost of capital improvements if any for all the work required prior to purchase
4. Ignore other geographic areas
This went extremely well for me, until I broke one of my own rules and purchased a house outside the geographic area. I’d like to blame this on a fast talking real estate agent; however it was my greed/ambition that truly was to blame. The main point here is one needs a set of rules or guidelines specific to his/her investment goals, geographic area and capabilities and stick to them. The above rules may not be applicable to your situation but are for illustrative purposes. After all everyone should have their own rules to live by (lol) In regards to investing in real estate or Yoga I hope the above may provoke some thought and provide some guidance.
Tags: Bad Tenants, Buying A Property, Canada Real Estate, Impulse Buying, London Ontario Canada, Maintenance Issues, Ontario Canada Real Estate, Perseverance, Personal Circumstances, Real Estate Investing, Real Estate Investment, Real Estate Web, Setting Goals, Successful Real Estate, Successful Real Estate Investing, Time Periods, University Of Western Ontario, Western Ontario Canada, Workouts, Yoga Practice
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Pitfalls Of Real Estate Investing
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| Submitted By: Kim Lee |
| |
| |
|
Investing in real estate most likely won’t produce the get-rich-quick results promised by many a late-night infomercial. But for investors willing to do some homework, make a good purchase and properly manage a piece of property, the rewards can be substantial. There are some common mistakes made in real estate investing that almost every novice makes. These pitfalls of real estate investing can easily be avoided. You need to know these mistakes or it could cost you a fortune. Paying attention to the smallest detail could net even more profits than you could imagine.
The first mistake you must not make is not formulating a plan. Every successful business has started with a marketing plan. They recognized the marketing niche which needed filled and offered the service to fill the void. This is what you must do to avoid the pitfalls of real estate investing. The marketing plan is easy to write. You must write it down. This gives you a visual of what you are doing. When you seem to get lost in the transactions, you can refer to this plan and get back on track. The marketing plan should include how many deals you want to process. You will want to list how much money you want to make. You will also want to put down how long this is going to take. Setting goals and sticking to them will make it easier to realize your real estate dreams.
Another pitfall of real estate investing is not knowing the market. You must know what areas are growing and which ones are becoming depressed. The last thing you want is to buy the dream home in an area where no one wants to live. This can be a costly mistake. Getting to know your market means knowing the price you can buy at and sell for. This is one thing that is a must when investing in real estate. Expecting every deal to be like the last one is a mistake many novice investors make. They get frustrated and disgusted when the second or third deal does not go as smoothly as the first. Some times the first deal is harder to put together than any other. Each transaction is going to be different. The home is different. The sellers want something different. You may have to use a lender or you may not. Each deal should be treated as though it were your first. This way you pay close attention to every detail and the risk of making a mistake is lower.
One of the biggest pitfalls in real estate investing is not properly estimating the property. The home you are looking at must be able to yield a profit. It does not matter if the neighborhood is great or that you would love to own that house. It must make sense financially to buy the property. If it is not a sound investment, do not do it. There may be a snag in the deal where the net profit is jeopardized. If this happens, check to make sure you are still going to gain. At any time, you can walk out of the deal should it turn sour. Do not try to salvage a sinking ship. Let someone else do that. Cut your losses before it is too late. Avoiding these common pitfalls when investing in real estate can save you headaches and finances. Remember to set up a marketing plan, know your market, research the property, and bail if the deal goes bad. If you remember these points you should succeed in the real estate investment market.
Article Tags: estate, investing, make
| |
Tags: Costly Mistake, Dream Home, Estate Dreams, First Mistake, Fortune, Homework, Infomercial, Investing In Real Estate, Kim Lee, Late Night, Marketing Plan, Niche, Novice Investors, Paying Attention, Pitfall, Pitfalls, Real Estate Investing, Rewards, Setting Goals, Successful Business
Recently someone emailed me from my real estate web page serving the London Ontario Canada real estate market asking for advice regarding the purchase of there first real estate investment. The next morning when I was practicing some yoga it occurred to me that successful real estate investing is very much like yoga. Both are very simple in execution and theory; however both require discipline, consistency and perseverance.
In yoga you take a relatively simple position and hold it for a long period of time to derive benefit. Likely at this point you see where I’m going with this analogy. Yes indeed real estate is quite the same. You take a position which is buying a property and hold onto that position for a sufficient period of time to derive a benefit. Sounds simple indeed! However, if you’ve tried yoga you know that it can be one of the most challenging workouts one can do. In real estate investing one can be challenged by, raising interest rates, bad tenants, vacancies, maintenance issues and perhaps most significant changing personal circumstances. You need to hold on to your position to derive a planned for or significant benefit, which in this case is significant appreciation of the property.
To derive a benefit from yoga one must have certain rules that have to be consistently followed. For example, one must plan for specific times per day or week to set aside for yoga practice. Other rules might be not to be overly fatigued, inebriated etc. for these time periods. For real estate investing setting goals is a separate issue from setting rules. In my opinion it is extremely important to do significant research so that one can realistically set certain rules as these rules will protect you from impulse buying and poor buying practices in general the least of which is one’s own greed or ambition. For example, many years ago prior to being a realtor I bought houses close to the University of Western Ontario Canada and fixed them up to rent to students. So here are my rules from this time period.
1. Identify certain geographic area based on travel time to the main campus.
2. Know market rents for this geographic area
3. Be very conversant with market value of properties in this geographic area and know cost of capital improvements if any for all the work required prior to purchase
4. Ignore other geographic areas
This went extremely well for me, until I broke one of my own rules and purchased a house outside the geographic area. I’d like to blame this on a fast talking real estate agent; however it was my greed/ambition that truly was to blame. The main point here is one needs a set of rules or guidelines specific to his/her investment goals, geographic area and capabilities and stick to them. The above rules may not be applicable to your situation but are for illustrative purposes. After all everyone should have their own rules to live by (lol) In regards to investing in real estate or Yoga I hope the above may provoke some thought and provide some guidance.
Tags: Bad Tenants, Buying A Property, Canada Real Estate, Impulse Buying, London Ontario Canada, Maintenance Issues, Ontario Canada Real Estate, Perseverance, Personal Circumstances, Real Estate Investing, Real Estate Investment, Real Estate Web, Setting Goals, Successful Real Estate, Successful Real Estate Investing, Time Periods, University Of Western Ontario, Western Ontario Canada, Workouts, Yoga Practice
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