The Top 5 Mistakes to Real Estate Investing
More millionaires are made in real estate than anything else. That's no secret.
Navigating the real estate market is a tricky process however—even the smallest mistake can cost you thousands and thousands of dollars.
If you're brand new to the real estate business, the first thing you need to focus on is strategy, which is dependent on your location, financial status, your goals, and the current status of the market. Start by booking your Gap Analysis with our team of experts, a free strategy session to figure out where you're at, what you need and lay out a roadmap for you to follow to achieve guaranteed success.
Most successful real estate investors had to suffer losses from their mistakes in the early stages of their careers. You don't know what you don't know, and for most, gaining the knowledge and experience you need in order to make big money in real estate takes a lot of time. But why take the long, hard road when you can follow in the footsteps of successful investors and take the fast track to real estate success? When the mistakes are laid out for you to learn from without actually making them yourself, you'd be crazy not to utilize that knowledge!
Let's look at the top 5 mistakes that are most commonly made by real estate investors, and how to side step them.
- The worst strategy is not having a strategy.
In the real estate industry, you have to do your research well and have a thorough understanding of the processes if you don't want to find yourself on the losing end of the bargain. Consult with a real estate expert before deciding to invest so as not to waste time, money and resources.
- Not every renovation is worth it.
Renovations are a great way to improve your property's value and increase rental fees. However, you have to consider that not all renovation projects will allow you to recover the cost. For example, you might want to remodel your kitchen or bath, but depending on the cost, the market and other factors, these renovations may not pay off in the end.
In fact, according to Remodeling magazine's latest Cost vs. Value Report, you can only expect to recover 56% of the money spent on renovations, which dropped from 64% the previous two years.
- Skipping a real estate broker license.
With the strong competition in the real estate industry, it's definitely worth the time and money to get a real estate broker license and a leg up on your competition. And to have a property management company, you have to be licensed. Getting a real estate license also means opening the door to networking opportunities along with access to more deals.
- Catering to the wrong avatar.
The real estate market is currently dominated not by baby boomers, but by millennials. According to statistics, half of today's homeowners are under the age of 36—which has created a huge generational shift in real estate.
The key to successful real estate investing is understanding who your clients are. With the dominance of millennials in today's industry, as a real estate investor you need to make sure you are catering to their needs and wants.
- Not knowing your market.
What's the difference between focusing on one area vs working in five or more real estate market areas? Familiarity. Sticking to one area provides you with a deeper understanding of your market and submarket, which is important especially in the early stages of your real estate investing business. It pays to know what your area has to offer—so don't let shiny object syndrome spread you out too thin and backfire on you.
So while it is true that more millionaires are made in real estate than anything else, it doesn't mean that it’s a guaranteed easy path. Modeling and mentoring with successful investors who have already navigated these treacherous waters, BEFORE you jump into big deals, is what is ultimately going to be the game changer for you in this industry.
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