Real Estate Investment: 5 Fatal Mistakes You Don’t Want To Make

Real estate investment is a strategy and not a sequence of disjointed transactions.

Investing in real estate is a trusted port for many. Yet, as with anything, there is a good way and a bad way to embark on a real estate adventure. From the experiences of professional real estate investors, we draw on five real estate investment mistakes that can be catastrophic for a beginning investor.

Buy a house and see what you do with it. Acting first and then thinking is rarely a good modus approach. The lack of a solid plan is by far the most common mistake made by aspiring real estate investors. However, it is quite simple: create a solid plan and find a property that suits your plan—first the strategy, then the concrete implementation.

Here, We want to share some of the most common mistakes with you so that you can learn from them.

1. Buying with emotion

As a real estate investor, you naturally want to give someone a nice place to live, to create a home. But you are not an investor for nothing, which means your real estate investment must also yield money. Unfortunately, we still see all too often that people buy with emotion, for example, by necessarily buying in a certain place because they themselves come from there. Because of that, they have a good feeling about that place. Even if that place is not the right investing place, they still decide to purchase there. That is a waste of your investment, time and return. A home must be good. It should feel clean, complete and pleasant. But in the end, you invest in making money with it.

2. Not Good Market Research

Before you buy, proper market research is very important. Because of this, you research what the appraisal prices, purchase prices, rental prices and rentability are, among other things. This sometimes felt tempting not to hire a professional for help to save money. However, if you don’t have the good market knowledge and not even consulted an expert, you could lose the brighter side of buying a profitable property. So, make sure you do good market research before buying somewhere so that you know for sure what you are doing.  

3. Outbidding

 When there are a few houses for sale, and it takes more effort to find good property deals (off-market deals), people are inclined to pay more to be able to buy. But in the case of real estate investment, you earn on the purchase price. Because if you buy well, you have to invest less from your own money. You can use that money that you have leftover to invest in another object or to get better financing conditions. Or you have built up equity faster that you can also withdraw to invest further. Our tip is, therefore: before going into a bidding war, be sure that this property is going to offer you good ROI. Have patience and go the extra mile to find and purchase the right property.

4. Invest to implement

First-time investors, in particular, are not willing to invest to implement. That’s a big mistake because when they invest in knowledge, they will save a lot of issues and a lot of time. You don’t have to spend thousands of dollars on this. But just start with learning the tactics of real estate investment. A good real estate agent can help you with this.   

5. Money is important

As an investor, you naturally want to earn on your investment. So, you want to receive a net cash flow every month. But a number of investors are going through this. For example, they choose not to install a new bathroom because this can quickly cost a few thousand dollars, and this is deducted from their return. While it is really necessary to prevent that there will be no leakage. They want to save in the short term, which will cost more money in the long term. Because if you really do get a leak, you will spend more time and money to fix it. So, make sure your objects are in order so that the tenant is satisfied and you can save money in the long term.  

Learning From Mistakes

We all make mistakes, that’s human tendency. The only difference is that we don’t see it as mistakes but as learning moments. If you look at it that way and actually get the learning moment out of it, it can take you further. Make sure you don’t repeat that mistake again. Look at the same circumstance in a different way the next time and make sure that you act differently. You may make another mistake, but this time it will be a different mistake and not the same one.  

 When you have read to this end, it means you are planning to invest in real estate. So, all you need is to start planning with a full-proof strategy and contact your local real estate agent for guidance.