Are you new to real estate investing? Trying to get your new career started?
Real estate investment is one of the safest and the most profitable investment options out there. By investing in multiple properties, you can generate a passive income stream that will allow you to gain the financial independence you have always dreamed about.
However, irrespective of your experience in this industry, there is significant risk involved. You can avoid this risk by not making the rookie mistakes that most newbies make.
Here are the 5 newbie real estate investing mistakes to avoid at all costs.
1. Relying too much on House Flipping
Flipping is a popular way to earn quick money in the United States. People are flipping houses, commercial office spaces and all sorts of real estate properties. To pull a successful house flip, you have to purchase a house on cheap and sell it immediately when the rates(economy) pick up.
Moreover, you should also make an accurate prediction based on the data that you collected by researching the real estate trends in your region. No matter how good your research is, there is always an element of risk. And the newbie real estate investors are the ones who always end up losing money doing house flipping instead of making a profit.
2. Not doing enough research
“The best way to predict the future is to study the past, or prognosticate.” Robert Kiyosaki
As a newbie real estate investor, buying a house or a piece of land is probably the most expensive purchase you will make in your life. The more the price of the property, the higher is the risk. Not doing enough research and making rash decisions based on current-emotional-state is the biggest mistake a newbie real estate investor can make.
You don’t have to be a genius when it comes to investigating properties and their prices. Just focus on the fundamentals of real estate investing and you will be fine.
3. Not seeking help or advice from experts
Most newbie real estate investors are so prepped up with the bookish knowledge that they forget to seek advice from the people who actually play the field. Not seeking advice and guidance from the successful real estate agents can also prematurely end your career as a real estate investor. You need to seek help from a whole bunch of people like lawyers, property management consultant, financial advisors, and home inspectors.
4. Failing to negotiate hard due to social pressure
“If the people around you are giving you the advice to slow down or to take it easy — you are surrounded by the wrong people.” Grant Cardone
Not negotiating hard is one of the mistakes that newbie real estate investors always make. They think negotiating is rude and it will spoil their reputation in the market. This is furthest from the truth. No matter how valuable the property is, always pay what you think the reasonable price for it. Do not overextend your budget just to be the first one to get your hands on a prime real estate property. Paying a high-interest rate on an unaffordable mortgage is not something you want to do.
No matter how diligent you are with your research and negotiations, you are still a human and humans are inherently doomed to make mistakes. Try to begin your career by investing in low-priced easy-to-flip properties. Small scale investment will allow you to take bold decisions and learn from the mistakes you make in the process.