It takes courage to prepare yourself to make your first investment, but it goes to show that you are concerned about your future. You can’t just let your money lose value resting in your safe. By investing some part of it, you can increase your wealth or even double and triple it. Now, if you are ready to invest, it’s the best time for you to consider investing in real estate.
But before you do, you will have to make sure you avoid the three big mistakes, which according to Anton Senderov – a seasoned real estate investor – are made by new investors more often than not. What are those big mistakes? Let’s take a look.
Thinking Very Narrowly of Real Estate
It is quite common for people to think that real estate is all about buying vacant pieces of land or houses and then selling them back into the market. Of course, that’s a major part of real estate but that’s not the only way you can invest in it. You have REIGs, real estate investment groups that can give you access to rental investments. You also have REITs (real estate investments trusts) that are companies on the stock market that engage in real estate investments through the ownership of real estate or by forwarding loans to other developers.
In addition to that, it’s not all about buying a property and then selling it for a profit. You can buy a property, keep it with you, and use it to generate monthly income for you. How does that happen you may ask? Well, you can purchase a vacation rental in an area with high tourism. It’s a great way to invest and generates ample income every month for the rest of your life.
Flipping Properties Is Easy
There are so many new investors who want to make quick money. They want to invest and get returns as soon as possible, and this is why flipping properties seems like a great idea to them. Well, you just buy a house, spend a few dollars on making it look new, and sell the house back for a profit. While assuming all of this, they completely forget that buying a property for flipping requires skills too.
“While you are trying to make money, there is a real estate agent on the other side trying to make money too. They might sell you a house that has structural damages and problems. You could end up spending thousands of dollars to fix those issues and never get that investment back when you sell the house back,” says Anton Senderov.
You have to keep your expectations realistic no matter which market you are investing in. Flipping homes generates profits faster, that’s true. However, to assume that it is a relatively easier way to make money from real estate is nothing but a mistake that many new investors make.
Not Researching Enough
So, your friend’s father has been making millions through real estate investments and you woke up one morning and thought you wanted to do that too. You went out to look at a few real estate projects and fell in love with the first one you saw. It looked like a perfect opportunity with a small down payment and a great future. Well, that’s where you are making a mistake. The ads for these projects are created in a way that every society and new real estate development project seems like the best one out there. However, unless you research and look at a dozen of such projects, you won’t be able to know which one is a good investment.
According to Anton Senderov, there are other risks in real estate investment too but these are the most commonly made mistakes. If you can avoid these mistakes, you have fewer things to worry about and even fewer reasons to lose your investment. So, if you are thinking about investing in real estate, make sure you rid your mind of any assumptions and hearsay.