Investing in real estate is one of the widely appreciated passive income sources that give you high returns for long-term. A right investment decision can make you a millionaire while a wrong one can break your self-spirit. To help you take the right decision, we are going to discuss the 15 commonly made mistakes that ruin a real estate investment and how you can avoid it.
Before starting any business, a thorough research work is necessary. It determines what your next steps should be to make the business successful. The research work should start with the present local market check and the future scope of your business idea. Also, researching your competitors well will keep you a step ahead from those who don’t research their competitors.
Once you have decided your niche of real estate investment, you should get into a conversation with the industry experienced professional to discuss the know-how(s). The wisdom you can get from an experienced person is not something you can get anywhere else. An experienced investor of your niche can guide you through the roller coaster and help you take the right decision.
The blunder a novice investor makes is choosing the wrong location. The location of a property determines its valuation. A property situated in a location which is easily accessible from the other parts of the city makes a great investment. And on the other hand, a property in a location which lacks proper commutes decreases the value of the property. Choose the location wisely!
While processing with any business or investment process, avoiding paperwork can cost you your peace of mind. Penning down every minute of your investment process will help you achieve your big goals in less time. Also, these papers will help you in the coming days of your investment venture if any legal urgency arises.
Rushing The Deals
n the industry of real estate investment, you will get to know about new investment deals every other minute. May it is full-financing or crowdfunding, the options are vast. Most newbies get attracted towards these numbers and start choosing deals randomly without checking the authenticity. Keep in mind that, choosing a hell lot of deals is not what you suppose to do but choosing the right one should be your priority.
High Level Of Expectations
Though investing in real estate is one of the best sources of passive income, it takes some time to work for you. You need to be patient and work smart to achieve massive success. Without expecting a quick return, build your portfolio to grab great deals.
No Risk Measurement
Every kind of investment comes with a particular amount of risk, as we all know “No risk, no gain”. You need to take some risk to achieve your goals. Investing in real estate is also not an exception in this case. But if you plan the process properly, you can reduce the risk.
No Cost Calculation
Calculating the expenses beforehand is the smart way to get success in any business. Only when you set boundaries and keep a tab on your expenses, you can maximize your profit. Expenses including investment amount, processing fees, renovation fees, and everything related should be recorded. Also, you need to control your expenses as the less you manage to expense, the more your profit will be.
Ignoring Small Details
The process of real estate investment involves a lot of small to big tasks. Many time newbies focus on one thing and lose all their energies thus forget about other tasks. Ignoring a small to the smaller task can cost something big. That’s why you need to take care of each and every small detail to make your investment work for you.
Choosing The Wrong Time
Investing in real estate in a wrong time has disastrous consequences. The returns on investment sometimes depend on the timing. There are times in real estate when the price of a property visibly increases and sometimes it decreases dramatically. You need to take care of this fact and act accordingly to get profit.
Choosing The Wrong Debt
Before choosing the debt, you should get to know the basics about it. You can contact a debt consultant if you are dealing in the residential property in Noida, Delhi, Mumbai, Kolkata, or any other major cities. Always try to go with a debt that requires you to pay more as down payment so you don’t need to pay a hefty rate of interest.
Avoiding Tax Benefits
Investing in real estate comes with several tax benefits. You can save a certain rate of tax at every level of real estate property processing. Get in touch with a debt consultant if you are investing in the flats in Noida extension, Gurgaon, Mumbai, Delhi, Bangalore, Kolkata, or any other metro cities. Ignoring these benefits due to lack of related knowledge is like leaving cash on the table. Make sure you are not making the mistake.
Bad Financial Planning
An improper financial planning leads you nowhere. You should plan all the expenses and gains properly to make your investment a profitable one. Start tracking your investment from loans, tools fees, task outsourcing charges, renovating charges, broker charges and all. When you have all these data in your hand, you will better price your property to get the maximum profit.
Limiting To Only One Market
When you are just starting with real estate investment, you niche down the market. But once you start to grow, you can try your hands in several niches and markets to maximize your profit. But before expanding, you should be aware of your goals and possibilities.
Not everyone is an all-rounder, and in the process of being all-rounders, we lose time and opportunities. Just like in any other process, you can outsource certain things in real estate investment too. It can be your market research work, legal work, or anything that can be better handled by a professional.