Real estate investing can be a path towards greater personal wealth, but there are plenty of wrong turns that you take along the way, or even at the beginning, which is why it helps to learn about some of the basic mistakes you need to avoid.
Getting acquainted with home builders in Collier County, Florida, for example, will be a good move, so that you can keep your eye on new developments, but in contrast, there are some things that you need wary of if you are going to make real estate investing pay. Doing your market research from the get go is the best strategy. You have to know what you’re working with. Finding a guide to real estate farming and/or reaching out to other agents in the area are great places to start.
Know your strategy from the outset
Probably one of the most damaging mistakes you can make as a real estate investor is to not have any clear strategy and a plan to follow, right from the outset.
A lack of planning is widely considered to be one of the biggest, and probably costly, mistakes that a real estate investor can make. A classic scenario would be to buy a property that you think is a good deal at the right price, then try to work out what you are going to do with after you buy it.
The vast majority of successful real estate investors would never work like that. You need to have a strategy and then find the sort of property that fits that strategy and plan, rather than the other way around.
Many homeowners fall in love with their property, and there is no problem that if you are going to live there, but if you are buying for profit, you need to remain emotionally detached.
This approach means that you make decisions about how you design and decorate the space, according to what your target market will be looking for, rather than putting in a kitchen or using a color scheme that is more to your taste.
This mentality also means that you should be able to rent out more easily and make a greater profit when you sell. It is all too easy to get carried away and install a top quality kitchen because you like it yourself, but that decision will be costing you potential profits, so step back and look at a makeover that appeals to your target market, rather than what you like.
Even if the final decisions and responsibility is down to you, a good real estate investor builds a team of professionals around them and forges some important relationships.
Getting to know some key local real estate agents, builders and tradesmen, will help to ensure that you are able to find out about new real estate opportunities as early as possible. Then, having a reliable team to call into action to fix any plumbing or electrical issues, or whatever else needs doing to the property, will ensure that you get things done quickly, efficiently, and at the right price.
You may well be the sole owner of a growing real estate empire, but you need to understand that it takes teamwork to truly succeed.
Abby Leonard jumped into real estate investing a few years ago after a redundancy gave her the necessary money to start on a new career path. She shares her journey; her tips and tricks online.