Investing in real estate can provide a great return on investment depending on the location selected but it is often presumed as a quick-fire way to become rich. It is true that many people have made their fortune investing in real estate but this is not as easy as it is said or projected by the so-called real estate ‘gurus’. This is a vast process and a matter of large investment. It takes time to be familiar with the ins and outs of the process but due to lack of patience and endless faith on those ‘gurus’, investors, especially the newcomers often make big mistakes while investing in property/real estate. Here are five of the most common mistakes that I have seen made by the new real estate investors.
Listening to the inexperienced people
When you are going to invest in real estate, you will find numerous people to guide you for a successful investment. But, upon the revealing of the truth, you will see that more than half of them have no prior experience of such investment. They give the suggestion based on their intuition. Such ‘jack of all trades master of none’ kind of people can even let you down from a great investment opportunity. You should at least make sure to listen to those who have prior experience of investment and are aware of the kind of situations may unfold after the investment.
Planning after the investment
This is another very common mistake made by the new investors. When you buy or invest in any property, you definitely have a plan after that. If you don’t have any plan, this may not be the right time for you to invest. You need to have a plan like what is your aim, what you want to do with your property, how you think things will shape up in future, how long you are going to hold your investment for, what kind of return do you expect; all these planning should be made in advance. Even, planning is important when you are buying property for your own. But new investors do the planning after the investment.
Thinking of appreciation and nothing else
If someone is buying a property or investing in property only for appreciation, it means, s/he is heading to a big trouble. The world of real estate is not a fantasy. And there is no assurance of appreciation on any given property. Moreover, price appreciation depends on so many things. So, without having proper knowledge about those aspects you cannot eye for appreciation. Even if it looks the most obvious thing in real estate investment, you should consider the worst case scenario as well. And this is not a matter of assumption.
Skipping the homework completely
You will definitely not consider yourself eligible for any surgery unless you have years of experience and training; similarly, you should not jump into the investment till you garner proper knowledge about the same. This is not gambling; you should always consult with a ‘doctor of real estate’ that is real estate agents. Only they can help you find the best deal in the real estate sector. And you can rest assured that even if you get small return, your money will be saved.
Go without paperwork
The final and the most common mistake that is made by the new real estate investors is to go with a person or project without proper paperwork. This may result in a massive loss of your investment. In order to become aware of the ins and outs, terms and conditions of the investment procedure, you must possess the papers. Those are the proof that you have invested the money and are eligible to be a part of the profit also. But without any paper, you ultimately risk your money.
Rumi Realty Point
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