Real estate investing is a potentially lucrative and rewarding undertaking, but mistakes can turn profit to loss in a hurry. Forbes has recently explored some of the most common real estate investment mistakes and offered advice on how to avoid them. This information can serve as important guidance for novice investors and a helpful reminder for the more experienced.
Not staying local
There is no national real estate market. It has been and remains a very local marketplace, and knowledge of local and regional market conditions is a must-have for the investor.
Managing real estate is a hands-on endeavor. If your property is hundreds of miles away, you have to spend time traveling back and forth or rely upon other people to manage and supervise it for you.
Important things like property conditions and tenant behavior can escape your attention if you don’t have your own hands and eyes on a property. This is perhaps less of a concern for an experienced investor with a network of professional help in place. But for beginning investors, staying in your own backyard is probably the best way to get started.
Getting emotionally attached
It’s natural to get emotionally attached to a house you are going to live in, but investors must take a different view of their property. If you are investing in real estate, how a property makes you feel must take a backseat to the only factors that really matter: how much you pay for it and how much you can sell it for.
Doing it all by yourself
The real estate world is large and complex. A single transaction may involve many parties, including the buyer, seller, inspector, appraiser, mortgage broker and even creative professionals such as stagers, interior decorators and photographers. Advice and representation from an experienced real estate attorney is also often necessary to protect your interests in a transaction. Building a network of trusted professionals can be a significant boon to your real estate investment career.