3 Mistakes the Most Successful Real Estate Investors Avoid
One of the greatest advantages of investing in real estate today is that it’s not a new endeavor. Ample people have tried their hand at real estate investing and we have a wealth of examples that tell us what to do and what not to do. This makes the effort much less daunting for any new investor and it also provides seasoned investors with ongoing feedback and insight. We’ve talked a lot about what you should do, but let’s take a minute to look at what you shouldn’t do—especially as you look at your investment opportunities going forward into 2015.
Don’t Plan as You Go. Instead, Plan Ahead. Sounds simple enough, doesn’t it? But, it’s easier said than done. The real estate investment world can be fast paced and exciting. It’s doesn’t take much to get carried away in the swirl of movers and shakers and the endless stream of potential opportunities. Yet, at the foundation, planning is about resources and goals.
“The problem is that most people look at real estate as a transaction instead of as an investment strategy, says Doug Crowe, a Chicago-based real estate investor and speaker. “People fall in love with a property. I say, ‘Who cares about the property?’ I fall in love with a motivated seller.”
Without a plan, it’s nearly impossible to keep your eye on the prize and all too easy to get in over your head. Be deliberate about your investments and you will reap the rewards. Be reckless and you will pay more than what you have.
Don’t Think You’ll Get Rich Overnight. We’ve all done it: dreamed of ways to make a lot of money in a short period of time. And, most of us have probably learned the hard way—if it sounds too good to be true, IT IS. This is never truer than in real estate investing. When you see that real estate investment is a strategy, not a transaction, you can grasp the notion of time required for success. A strategy is no short-term tactic. It’s a long-term plan. Real estate investment requires patience and the ability to avoid making emotional choices. Sure, you can love a property and what it promises. But, you must always take it back to your plan and remind yourself that success takes time.
Don’t Cut Corners. Strong real estate investors educate themselves; check and double-check their work.
- You must know the market.
- You must understand the world of real estate investing.
- You must compare your prospective investment to other similar investment properties in order to avoid overpaying.
- You must overestimate expenses to avoid any surprises that will compromise profit.
- You must know the laws that affect your investment and ensure you comply with them.
Then, you must review your research and even ask colleagues to look it over for you, before making any moves.
When it comes down to it, real estate investing is about time. Take your time, think it through and relish the day when it begins to pay.