To err is human. Everyone makes mistakes. But when it comes to real estate investing mistakes can be costly.
Real Estate Investing is a rewarding path to financial freedom and generational wealth. But it can also take a lot of work to figure out what is going to be the fastest, most successful path to that wealth.
Both new and experienced investors make some pretty simple errors that cost them big in the long run.
Which makes that path to wealth longer and slower than it needs to be.
But we're here to help you. So in that spirit here are five pitfalls you don't need to walk into.
We've said it again and again, poor planning will lead to poor results.
If you don't plan properly you won't achieve the results you're expecting. You might actually end up worse off than when you started.
Basically, if you don't know where you're going how will you ever get there?
Here's what you should be asking yourself when making your investment plan:
Goals and Objectives - What are you trying to achieve? Why are you investing?
Risk Consideration - How much risk can you take on? What are the risks your investment strategy has? How are you going to deal with them?
Finance - How are you funding your investments?
Assessments and Loss Cutting - How are you tracking your investments success? What targets should they be hitting?
Stick to the plan - Are you sticking to your investment plan? Is it still working for you?
Don't invest without a solid, well informed plan. You'll only wind up in places you don't want to be.
This one is something that the more neurotic investor will fall into: investing at the right time in the cycle.
Like every market property works in cycles, sometimes it is booming sometimes it isn't.
And while it is worth considering the timing, it shouldn't be holding you back from making great investments. Bargains are great, but good investments are better.
When you're purchasing property you should be considering whether it is the right time for you, and whether it fits in your investment plan.
Timing isn't everything. Patience, planning and hard work is what really matters.
Don't do it. Just don't.
When you're buying investment properties you need to be thinking with your head, not your heart.
Always insist on, or carry out yourself, a thorough property inspection.
Not every issue can be seen with the naked eye, so check thoroughly for any issues or problems the property has or may have in the future.
Investing in property is about buying buildings that will rise in price, not buying nice homes.
We've seen too many investors buy a home that just isn't a real investment property, and while house prices generally always go up you want your investments to be working hard.
Not just floating up with everyone else.
So here's the tip: Buy according to the plan, and only the plan. If an 'opportunity' doesn't fit your carefully considered plan do not buy it.
After a string of successes it can be tempting to think you've got the whole property game figured out. '
Stop that thought in it's tracks because that attitude is what leads people off their plan, and into financially risky territory.
Overborrowing is something that can be hard to get out of. It might be hard to refinance, and it might set your plan back years if everything goes pear shaped.
So don't get cocky, only borrow as much as you need.
People walk into these pitfalls when they stop following their plan, or don't plan properly.
But if you create a solid plan, buy when it is right for you, think with your head, and stay humble you will be able to avoid those common investing traps.
Stick to your plan!
And if you need help making a plan, or want some experts to help you make it even better get in contact with us. We're here to help you invest with confidence.