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10 Costly Mistakes to Avoid as a New Real Estate Investor Most new investors bank on the fact that right off the bat the property is cash flow positive but they aren’t factoring in all the expenses. If Kathy holds this property for 30 years without increasing the rent, she would have a 6% total return on investment. “Six percent is not horrible, but any type of balance mutual fund over 30 years has done 6%. Error No.2 Example: Banking on the Property Value Appreciating One of the reasons so many people can get into real estate investing is because they can borrow money to purchase a home. This works when home prices are on the rise, but as we saw in 2007, prices can’t rise forever. Leverage is what draws investors in when real estate values are growing, but if the value of a property decreases, the investor using leverage will not only be multiplying losses on the investment, but interest payments on the loan will also continue to build up. Be careful using debt to generate a return. Take your time and calculate your expenses properly and this will help you increase your monthly cash flow in the short and long term. 50 10 Costly Mistakes to Avoid as a New Real Estate Investor
10 Costly Mistakes to Avoid as a New Real Estate Investor Mistake # 10 Overpricing Fix and Flip Properties Once Completed and Ready to Market 51 10 Costly Mistakes to Avoid as a New Real Estate Investor
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