Since 2008, there has been an extreme outflow of interest in the real estate market. As market returns continue to exceed expectations, more and more people look at the world of real estate investing. While there is money to be made, first-time investors should avoid these roadblocks to reach their path of success.
Lack of Confidence – Don’t roll your eyes. Confidence is important. Without it, you will doubt yourself, second-guess your choices, and will ultimately be the cause of your downfall. Even if you have no one offering support, you don’t have to live with a lack of confidence. Overcome this fear before deciding to invest. Build your confidence by investing in yourself by researching and becoming more knowledgeable. Here are a few questions to determine what information you need to learn to capitalize on opportunities and in return, believe in yourself:
- What does a great deal look like?
- How to purchase the right loan and lender?
- How to calculate your maximum offer?
- How to find the right house?
- How to find tenants?
Running The Numbers – Preparation steps like this one not only protect you from making the wrong purchase, but it also helps to build your confidence in real estate and investing. The key to running the number is remaining realistic. Look at the numbers and trust your math. While optimism in investing is good, it is essential to be realistic while making investment choices, followed by optimistic hope for growth and sales.
Money – There is this idea that only the rich and fortunate can invest in real estate which prompts many to wait to get started or take action. However, it’s not about how much money you have to invest. It’s about what you do and how you do it. Savvy investors can find properties out there for less than $10,000. Even if you don’t have thousands of dollars to invest, there are many different ways to finance an investment from lenders and credit cards to partners and co-signers.
Contractor Quotes – When purchasing a home, even if it isn’t a fixer-upper, it is imperative to hire a contractor for real quotes on rehab costs, or repair and renovation costs. If incorrectly calculate, profits could be negatively impacted. If you overestimate, you may pass up on the investment, giving the deal to another investor.
Factoring Risk – Even though real estate market returns have been higher than other investment returns, such as stocks, it is important to recognize the risk in all investing opportunities. There is just no such thing as a risk-free investment.