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10 Costly Mistakes to Avoid as a New Real Estate Investor Market Analysis: The first component to developing real estate goals is a comprehension of your market, which implies doing your homework beforehand. It’s important that you conduct a market analysis, as to first identify a need in the market, as well as trends and changes that are occurring. As an investor, you will need to seek out everything you can about a real estate market, including the median home price, appreciation rates, gains in total home equity, home affordability, the health of the local economy, as well as new housing construction. This will provide a snapshot of where the market stands, and how you can add value as an investor. Additionally, this information will better assist in not only forming your goals, but detailing where you should invest and how. Your Niche: The next aspect to consider when setting real estate goals is determining your niche. Because there are endless investment avenues with real estate, it’s critical that investors identify a starting point. Identifying your real estate niche will not only help to refine your approach moving forward, but assist in distinguishing yourself from the competition. In addition, a real estate niche will be aligned with strategy to achieve a vision or goal — whether to prepare for retirement investments or establish a steady flow of passive income. Tips for discovering your real estate niche in 2017 include: Defining your purpose, identifying what you’re good at and what you enjoy most, understanding how you can add value, and uncovering if there’s an actual need for you. How Realistic Are Your Goals? There are unnecessary costs of overshooting real estate goals, including your time, money and reputation. Following the S.M.A.R.T. framework, it’s imperative for investors to examine their goals and determine whether or not they are realistically attainable. In most cases, setting unreasonable aspirations can have profound impacts on a real estate investor and their business. It can ultimately create a culture of failure; one where failure is not only excusable and accepted, but rather expected. 36 10 Costly Mistakes to Avoid as a New Real Estate Investor
10 Costly Mistakes to Avoid as a New Real Estate Investor Part-Time Or Full-Time? Another important factor to think about when setting real estate goals is time. How much of your time do you want to dedicate to investing in real estate? Better yet, how much time do you actually have available to focus on real estate? Identifying the amount of time you have to spend will help investors to align their efforts with the right real estate investment option to achieve it. For instance, rehabbing a home will encompass a significant amount of time for investors (whether new or seasoned), which will eventually limit their time. Another investment outlet, such as wholesaling, may better suit their time limits, while also achieving their primary goal. Real estate wholesaling is similar to flipping except that the time frame is much shorter and no repairs are made to the home before the wholesaler sells it. A real estate wholesaler contracts with a home seller, markets the home to his potential buyers (usually fellow investors), and then assigns the contract to the buyer (usually a fellow investor) Profitability: Profitability is the name of the game as a real estate investor. However, every investment avenue will differ, including the average potential profits it will produce. In return, it’s critical for investors to examine the exact dollar amount they’re seeking to obtain with their investment business. Similar to determining the amount of time you’ll dedicate to real estate, it’s essential you calculate the profitability you’ll want to make from real estate investment deals. The best advantage real estate has to offer is the freedom of choice. From rental properties to house flipping, the type of income you wish to earn will relate to your investment vehicle. If you’re looking to earn residual income, your approach to investing will differ from those seeking to obtain one large sum. 37 10 Costly Mistakes to Avoid as a New Real Estate Investor
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