1.) Not getting thorough inspections done
While inspections can be costly and tedious, you cannot risk finding out that your new investment has a critical structural defect after you’ve purchased the property. If you forgo the necessary inspections, you’re risking having to fork over additional thousands or tens of thousands. It’s not worth it – get your inspections done. Here’s a list of things you may need to get inspected.
- Wood-destroying pests/dry rot
- Heating and air conditioning
- Pool and spa
- Sewer or septic
- Soil stability
2.) Buying based off of personal taste or emotion
If your real estate portfolio has a specific brand image, that is one thing, but if you find yourself considering a property based on the fact that you like it personally, be careful. Never buy a property based off of feeling alone. You need to put in extensive time and effort to analyze and research your choice before you purchase. Your investments are supposed to earn money for you. Don’t base your purchasing decisions off of anything other than cold, hard facts and data.
3.) Buying a property that is affordable but barely livable
If you wouldn’t want to live in the home, why would a prospective tenant? Unless you’re looking for a fixer-upper, leave cheap, nonefficient properties alone. It will be significantly more difficult to find tenants for your property. In addition, that home will be a lot less likely to sustain its value. Invest in a home that will be comfortable for tenants and will retain its value, in a market that sustains property prices.
4.) Thinking you know more about the market than you do
If you are newer to real estate industry, you must understand that mastering the property market takes time. You can’t become an expert by reading a book or two, attending a webinar, and watching a few YouTube videos. You should be consistently seeking out new information from credible sources in order to build your real estate knowledge to a point where you can confidently identify investment properties that will supply you with a high return.