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Follow on Google News | Top 10 real Estate Investor mistakesBy: Jan Keller Sure, there are peaks and valleys, but in general, real estate enjoys an upward trajectory. One of the reasons it makes such a good investment is because it’s tangible and has discernible value. After all, everyone needs a place to live and this is why real estate makes an excellent investment choice. If you’re new to real estate investing, understand this isn’t a get rich quick proposition. Those who make the most money in this endeavor are those who buy and hold as a long term strategy. Of course, there are property “flippers,” 1. Planning during and after purchasing, not before. In the world of real estate investing, “winging it” and success are decidedly different. There’s too much left to chance if you don’t have a realistic, workable plan. You must have a clear path to follow to stay on budget and get any repairs and improvements done in a timely manner. 2. Not setting specific criteria for a home. This is a huge mistake because you could inadvertently purchase a property that won’t fit your ultimate needs. It must be able to perform in a way that’s not only workable, but lucrative. 3. Investing with emotion, not with critical thought. My first time real estate investors like to purchase property that’s in their own neighborhood -- which is a huge mistake. Not only will it greatly increase the hassle factor, it’s also myopic because better deals could be on the other side of town. 4. Relying on the wrong real estate agent. This one is simple -- there’s no substitute for experience. You need someone that’s been involved in these transactions before. 5. Not getting the advice of a contractor. Too many miscalculations can be made by amateurs, so, avoid underestimating by bringing a contractor to view the home before you commit to buy. 6. Forgetting to include vacancy periods. This is an inevitable reality that too many new investors don’t factor into their costs. 7. Not including maintenance costs. Maintenance is a must, and, it can turn an otherwise profitable investment into a drain on the wallet. 8. Over-improving a home. This is making improvements which cause the value to exceed the neighborhood, which means being stuck with that particularly property in virtual perpetuity. 9. Not creating a contingency plan. There are always changes in life, and, you need to be prepared for more than one scenario. Perhaps the biggest mistake new real estate investors make is not having their primary residence paid off or having a very low principal balance. End
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