So you’re thinking about taking the plunge and investing in real estate. First of all, congrats! Buying property is a great way to expand your portfolio, and it can create a lot of equity in the long run. However, if you’re new to the world of investing, you might want to press pause for a second.
Want to avoid some of the worst investment mistakes? Here’s our list of the top 4 blunders to look out for.
Planning as You Go
This tip isn’t just for those thinking about investing in real estate. Anyone who’s thinking about buying, selling, or renting a property should begin the planning process way before making a move. This will reduce stress and allow you to prepare for all scenarios, good or bad.
Wondering how you should plan for your investment? Sit down with your agent and figure out your budget and financing options. Even if you find a property that seems like a good deal, you’ll want to find a home or building that fits your initial parameters. When in doubt, be sure to make a logical decision instead of an emotional one.
Not Doing Research
This one might seem like a given, but many first-time investors don’t do enough research before beginning the process. Investing in real estate is more than just a transaction—it’s a long-term commitment that requires plenty of consideration.
If you don’t know where to start, just reach out to a local agent or a trusted investor in your community. Be sure to learn all about the kind of property you’re looking for, the area you’re interested in, and the amount of returns you should expect. Remember, it’s always better to be fully ready than under-prepared.
Expecting Immediate Results
Picture this: you bought your perfect rental property, fixed it up, and found the perfect tenant. This means the money is going to start rolling in, right? Many newbie investors think they’ll see an instant return once they start renting out their space, but this isn’t necessarily the case.
However, don’t let this deter you from jumping into the world of real estate. Sometimes it can take a while to see big returns on your property—it’s crucial to be patient. If you want to calculate the rate of return before investing, most experts suggest subtracting the gain from investment from the cost, and then dividing that from the cost.
Doing It All on Your Own
If you’re just managing one property, it might seem easy to do it all on your own. However, many rentals require just as much or more upkeep than your primary residence, especially if it’s a larger building. Luckily, there are plenty of services that can make ownership easier.
Be sure to invest in a good agent and attorney to advise you along the way. Once the transaction is completed, you might want to look into property management companies to find you a tenant and handle the details. In fact, Marsha Marsh Real Estate Services offers property management assistance to investors in the Erie area!
Ready to Start Investing in Real Estate?
The investment process doesn’t have to be difficult. In fact, consulting the right resources can make everything a whole lot simpler than you might expect. If you’re ready to make a move, just contact the Marsha Marsh Team! We offer property management services and can’t wait to help you find the perfect investment. Just reach out to us with any questions!