Contributed post
Earlier this year we published a post on some of the best investment possibilities for people who were just starting to think about looking for a way to boost their income. You might have noticed one of the options that we suggested was real estate. Real estate can be a fantastic possibility for anyone regardless of knowledge or experience. The two options when investing in real estate present fantastic opportunities for middle-income families, adventurous entrepreneurs and anyone eager to explore a new revenue stream.
One of the biggest benefits of real estate is that it can boost your money in two ways. Either, you can make a short-term massive profit by selling, or you can also consider renting it out in the long term, adding a comfortable second income for you and your family.
While the real estate market is certainly accessible, new investors exploring this sector, often make a few mistakes. Though not always detrimental, they can have an impact on the value of the investment, the duration it takes to make a profit and even the general enjoyment that people can get from an enterprise such as this. So, let’s look at some of the greatest mistakes and ensure that you have the wisdom necessary to avoid them.
Too Much, Too Fast
It’s easy to feel over excited when investing in property. You have probably already spoken to someone who has made a fortune on their own property investment. Perhaps they even managed to double their income seemingly overnight. But investing in property isn’t something you should rush, and it could definitely be a mistake to invest too quickly, in a high number of properties. Instead, you should start off with just one. You can purchase a house, an apartment or a holiday villa and go from there. Whether selling or letting, this will still provide you with a sizeable income but one that you will find easily manageable.
Don’t forget that from housing taxation to landlord responsibilities, owning a second home or building is not as simple as it may first appear to be. Of course, once you have found success with one building you can certainly consider expanding your real estate investment and perhaps diversifying your portfolio, one property at a time.
It’s Not About Quality
Actually, it is because if you’re not investing in quality buildings and fantastic developments, then you will gain a reputation on the market for being someone who buyers shouldn’t trust. While it might be tempting to try and purchase a terrible property at a fantastic price and sell it off for far more than it’s worth, this can lead to a series of problems that may even include legal complications. Imagine for a moment that you invested in a new development, where the contractors used were unlicensed and underskilled. An investment like this is probably on the market at a price more than affordable for most. Yet, a few years after making this investment, you might find yourself in a legal dispute. Perhaps the building wasn’t as stable as it should have been, injuring a tenant or indeed a buyer. You can see now why a great property investment deal that’s a lot cheaper than it should be, isn’t always what it seems.
So, what type of buildings, properties and homes should you be looking to invest in? Well, be on watch for investment opportunities that while pricey, are luxury accommodation or modern builds. Or alternatively, cheap properties on sale from a site you can trust like rumahdijual.com/bogor/perumahan-murah-bogor-tanpa-dp. This example shows that cheap properties aren’t always bad news, you just have to be careful about where you find them. This brings us to another mistake new investors often make.
Going It Alone
With any investment, people often look for a way to make the highest amount of money while spending as little as possible. This is not smart business sense, and the old saying rings true here, essentially you will need to spend money to make money. That is why we recommend you do use the services of an investment adviser. You might think that you are prepared to handle property investments yourself. You might think that you know enough because you have bought and sold personal property before. But there is no substitute for having a highly skilled and trained expert on your side when searching the property market for the right deal.
An adviser won’t just give you information about the right properties to invest in, they will also hold your hand every step of the way. And don’t forget, the seller always has a professional representing their interests, so you should have one representing yours.
Taking A Chance On A Fixer-Upper
If you don’t have much money and you don’t want to borrow, you might just be considering investing in a fixer-upper. What is a fixer-upper? Essentially, it’s a home that has seen better days, and you could be led to believe that it just has aesthetic issues. A little paint, a little elbow grease and it could be ready for the market again, right? Not necessarily because these types of properties often have more serious issues than first impressions will lead you to believe.
Fixer uppers are often old, and as such, they may not be up to official codes and regulations. This means you are going to have to pour money into them to ensure that they even match health and safety standards. It can be like purchasing a totalled car, the issues are so severe that you might get more money from scrapping it, or in this case, tearing the building down. You can learn more about tearing town properties on clubsnap.com/forums/showthread.php?t=504250.
If you do want to purchase a fixer-upper and are willing to take the chance, always get a survey. You need to know exactly what type of issues you could be dealing with and the possible costs.
Going It Alone – Part 2
You might want to invest in property, but unfortunately, you don’t have the money. You may also be unable to borrow the money due to previous financial difficulties. If so, consider what most new investors dismiss out of hand completely. Make it a joint investment and find some business partners. There are a few reasons to do this. Obviously it is going to limit the amount of financial pressure you find yourself under, and any losses will, of course, be halved, but it also relieves the pressure of managing the property as well. Different people involved in the investment can take on various roles and you can learn about some of the jobs on thebalance.com/before-buying-rental-property-2388762.
By doing this, you will find that an investment that would have cost you one hundred or two hundred thousand is actually only going to cost you about ten. This is a far more reasonable amount and one that you probably already have in your account.
Racing To The Finish Line
Finally, one of them most important things you need to realise about the property market is that it is constantly moving, changing and shifting. Unless you are an expert analyst, it’s impossible to predict what’s going to happen next. Why is this relevant to you?
Well, let’s say that you buy a property for two hundred and you spend a few months fixing it up, preparing it for resale. By the time you put it back on the market, it’s value is two fifty due to the changes you made. But because of an issue with the economy, the agent recommends an actual selling price of one hundred and fifty. Oh dear, that’s not what you want at all because suddenly an investment has become a loss. As tempting as it is in this situation, you shouldn’t cut your losses. Like a player at the roulette table, you should hang in there a little longer. Since the property market is constantly changing you can expect more positive things in a few months or even a year.
So, while some people can get lucky and make a fast, profitable sale, property investments are often a waiting game.
Learn from these mistakes, and you’ll have no problem conquering the property market as a new investor.