Investing in real estate is not as easy as it sounds, especially if you are a newbie. It is not about simply buying a house, filling it with rich tenants, and raking in the cash for your retirement process. The entire activity demands a lot of deliberation and consideration.
If you are going to enter into the real estate market with your first investment, you might be worried about committing those blunders that can cost you a fortune. Well, fret not! While there is a plethora of rules to investing in real estate to keep you on track, this article sheds light on some of the most common mistakes that any novice investor might end up making in a rush to accumulate money.
So, whether you are planning to invest in The Valley by Emaar or luxury homes in Naseem, Mudon, read these property investment mistakes so as to avoid landing in troubled waters.
Not Preparing in Advance
Not having a proper plan is one of the most common property mistakes you need to avoid. The solution is to craft out a strategy before you start investing in a real estate market.
Property investment is like a roller coaster ride. It doesn’t matter how tempting or good the offer is, you must carefully analyze and think thoroughly whether or not the opportunity suits your preferences.
If you are buying a property for the very first time, take into account all the factors such as the price, your requirements, future upkeep costs coupled with the growth potential of the property. Thus, never make a hasty decision. Always plan in advance everything before you take a plunge.
Taking Help from Wrong People
You need to hire the right people to get the best results. From hiring a real estate agent that will assist you in securing the deal to the construction workers that will be working on your property, everything should be done with due diligence.
For that, get referrals from your friends and families. Also, make sure you do a small check so as to hire the right experts for every task.
Not Examining the Market Enough
Buying and selling property requires a lot of research. It’s just not like buying a plot in your nearest neighborhood. It’s about figuring out what type of living space you can construct on that plot. Also, you need to consider the regional zoning permissions and the neighbors as well.
Thorough research is needed in order to make prudent financial decisions linked with property investments, including the average prices in a specific area, the demand for rental properties in a locality, and more. Therefore, all amateur investors need to avoid this mistake.
Aiming for Short Term Returns
This is yet another big mistake in which investors either lack uncertainty about their returns or how soon they get a return on their investment. Both cases can result in causing confusion as well as frustration. Therefore, you don’t need to focus on achieving short-term goals.
In general, real estate is an industry that will pay you off in the long-run. Many experienced people will guide you to invest in developments that will help achieve your long-term benefits instead of a quick grab-and-go scheme. The latter is not profitable at all.
Not planning for Unexpected Expenses
Sometimes, even if you have done sufficient research, you will be hesitant about paying more than the actual worth of the property. And what if you missed or ignored a major structural flaw that is capable of breaking your bank in the near future? Under such situations, you might end up spending a lot of money.
Therefore, you shouldn’t be spending more than your worth when you’re investing in real estate. While making your financial plans for investment, it is suggested to set an upper limit. For instance, if you are planning to invest in DAMAC Paramount Towers, you need to keep some money aside for emergencies and sudden expenses. These expenses could be medical, personal, or in the form of crucial or instant home repairs.
Therefore, take into account all these considerations while making any real estate agent. This is the only way to earn good money without committing blunders.