The real estate boom of the early 2000’s has offered a wide variety of investment opportunities. These have provided large numbers of rookie investors with great tax benefits, positive cash flow and a great feeling of satisfaction. Now, the situation is a bit different, and that is mainly attributed to the ever rising interest rates. If a certain investor chooses to continue to operate in the real estate market, he/she needs to make sure to steer clear of many, potentially very costly mistakes.
Mistakes to avoid when investing in real estate
In order to keep up the pace with the real estate market, an investor needs to plan accordingly. Nowadays, the trend of quick turnarounds is all but over. A good investment needs to be considered long-term or mid-term. Of course, if there is a nice short-term profit, there will be no complaints. However, it is always better to do long-term planning.
2. The numbers
Whenever you plan to buy a real estate property from an investment holding or a professional seller, you need to review the numbers and all the little details of the deal very carefully. Regardless of how tempting the deal might look, you must check the numbers in regards to the contract features, such as the overall payment history, expenses, expected rents, existing deposits, HOA fees, and any future expansion plans and modifications. You need to check anything that can have a significant impact on your ROI (Return On Investment)
3. The insurance