If you are a new real estate investor, these are the three huge mistakes you need to avoid to keep your business profitable.
3 Big Mistakes New Real Estate Investors Make (and How to Avoid Them)
Check out the three biggest mistakes new investors make:
- Paying too much
- Failing to have a great team in place
- Buying in the wrong location
Here’s a closer look at each.
New REI Mistake #1: Paying Too Much
Overpaying for an investment property is the single biggest mistake you can make because it cuts into your profits. When you purchase an investment property, you need to put in the hours and do a significant amount of homework. That way, you can make sure you’re not overpaying for something that won’t have a big enough return.
New REI Mistake #2: Failing to Have a Great Team in Place
Every investor needs to have a great team in place before diving in with both feet. Your team should include a professional real estate agent, a reliable lender, a general contractor who can manage all sorts of projects, and a few other professionals.
Related: Pros of hard money loans
New REI Mistake #3: Buying in the Wrong Location
Location is incredibly important when you’re choosing an investment property. That means you need to do extensive research on the area to make sure you’ll be able to sell or rent out any property you purchase there. You want to look at school systems, crime rates, local attractions and even weather data, such as how often an area floods, before you make a decision on a purchase.
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