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10 Costly Mistakes to Avoid as a New Real Estate Investor
It pays to do your homework and to tap local resources to determine which
areas are hot now and, more importantly, which ones will be hot in the
future. Much of the information is out there and free for the taking. You just
have to be willing to do the leg work. Before most people buy a car or a
television set they compare different models, ask a lot of questions and try to
determine whether what they’re about to purchase is indeed worth the
money. The due diligence that goes into investing in a property should be
even more rigorous and detailed.
Depending on your investment objective, there are also research
considerations for each type of real estate investor – whether a personal
homeowner, a future landlord, a flipper or a land developer. Not only must
the prospective real estate investor ask a lot of questions about the property,
but he or she should also inquire about the area (neighborhood) in which it is
located. (After all, what good is a nice property if just around the corner is a
college frat house known for its all-night keg parties? Unless of course, you’re
attracting a student renter.)
The following is a short, but not all inclusive list of questions that
would-be real estate investors should ask themselves regarding the
property in question:
-Is the property built in the vicinity of a commercial site, or will long-term
construction be occurring in the near future?
-Does the property reside in a flood zone or in a problematic area, such as
termite problems?
-Does the property have foundation or permit “issues” that will need to be
addressed? 17
10 Costly Mistakes to Avoid as a New Real Estate Investor