Updated: Jan 6, 2020
With a carefully thought through outline of your investment journey, you will end up exactly where you want to be
So plan your action and then action your plan.
Real estate investment is the investment for future which can be highly profitable if you avoid common mistakes in making investment in apartments, having several advantages including potentially higher returns, stability, inflation hedging, and diversification. If you do them there is a risk owning a property – rather than a profitable investment.
Successful wealth creation through real estate requires you to set goals, determining how much you want to invest, and then devising a cohesive plan to get there. You need to focus on both the short and long term goals and ensure your investment decisions gel with your overall strategy and find cheap land for sale near you, which have a potential of value appraisal.
Real estate for beginners can be challenging and risky if you do these biggest common mistakes which every beginner do in their real estate investment.
1. Forgetting About Minor Costs:
Your loan will probably not be the only cost when it comes to buying an apartment building. Smaller costs like property insurance, taxes, electric and water bills, and other fees may start to pile up. You need to see all the hidden charges before making any investment. Before buying an apartment, you may need to look further into your savings to figure out if you can pay for all of these additional charges. Get copies of actual 12 month of bills. Section out what may have been a capital expenditure vs a true expense item.
2. Not Lining Up The Infrastructure and Systems Ahead Of Time:
I am a planner by nature. So I believe in setting up the systems, the infrastructure and the operations for your "apartment business" and the operations surrounding your "apartment building(s)" ahead of time. For example: set up the accounting system (i.e. QUICKBOOKS), select your property management firm, legal structure of your company or investment entities (i.e. JV or PPM). Setting up your rehab and construction crews, investor relations team, website, marketing and more. Due the hard work upfront because it will save you a lot of headache later. EXAMPLE: When we set up The Brennan Pohle Group, I made sure I had the LLC set up, basic website, logo, stationary, custom logo checks, property management software, accounting software, bookkeeper, accountant and legal. This way, once we started finding deals, the process of buying, onboarding and operating those deals and investor relations was much more seamless. If you don't know how to do these things, that's ok, delegate out your weaknesses or find a partner who does the things you suck at. Make sure any partnership you have, you and your partner bring to the table conflicting attributes. This way, you will naturally blend talents and add value to each other.
3. Not Looking For Having All The Facilities Available Nearby: The basic life facilities are important factor, presence of each facility increases the chances of property value appraisal very soon. Most of the time ignoring this point can make greater chances of loss, or delayed time in appraisal of value of your investment. You need to wait long for that, and if there are already every facility available, the chances for secure investment are highest, you don’t have to wait long for increasing it’s value.
4. Waiting Too Long To Get Started: This to be the biggest mistake of fear of loss holding you back, if you fear of getting loss and holding an opportunity for too long can lead to missing out on a great upswing in the market and wouldn’t be on the track to financial freedom today. Sometimes, though, you need to still kick yourself for not starting sooner. The moral of this story is this: Don’t let fear of the unknown keep you from trying something.
5. Conjecture Over Patience: If you think you are going to be a millionaire in one night or month you are wrong. Most of the beginner investor do this mistake that they think all their financial investment will be double or triple in few nights, well that’s not right. It is not how property investment works, it requires a lot of patience. It takes time for your investment to increase and make you successful investor. By approaching property investment with patience and persistence, you will gain far more success (and wealth) than if you seek out the “next big thing”.
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