AVOIDING COMMON PITFALLS
Success will elude if you are unaware of common pitfalls and have no idea how to avoid them. You may end up losing time, money, and patience in the process — and the prolonged frustration can turn out too much to overcome. Here are some painful examples of mistakes made by first-time real estate investors:
CHASING THE HIGHEST YIELD
Properties with the highest yield normally come with the highest level of risk (e.g. extensive repairs, tenant turnover, vacancy). Know the challenges and recognize the different types of properties before you invest, so you can account for these costs ahead of time.
MISSING THE FULL RANGE OF COSTS
A property’s expenses include repairs, HOA, vacancies, taxes, and home insurance. If you fail to account for all the costs, your projected returns will be significantly lower than you anticipated.
ARBITRARY GEOGRAPHIC LIMITATIONSARBITRARY GEOGRAPHIC LIMITATIONS
Limiting yourself to only your immediate area may not exactly be the best investment strategy. Areas outside your current location may provide higher returns with lower initial investments. Condition yourself to look across the nation for the best real estate investment opportunities.