Six Common Mistakes to Avoid

 

Tips To Becoming A Smart Investor

Hello, Everyone

We found a good article on real estate investing that we would like to share. The article was on Smart Business Online.The title of the article is “How to avoid the common mistakes when investing in Real estate for the first time.” It’s a good article that we would like to put our spin on: Auben Style.

Courtesy of www.triplejack.com

Here are some tips:

• Have a plan

“Have a well-thought-out plan. Individuals who jump into this industry lack a plan. It’s the biggest mistake first-time investors can make.”

• Exit stage left

This is a major pitfall for novice real estate investors. Often times novice investors only have one exit strategy, if they have one at all.  The people that got burned by the recession of 2008 only had one exit strategy: sell. When factors beyond their control: credit crisis, moratorium on financing, etc. occurred, they were left with nowhere to go. This is why it is shrewd to make an investment decision based on current market conditions rather than projections on how much a home will be worth in the future. Always have multiple exit strategies. It will save you a lot of heart aches.

• Know the market

This is extremely important. Know your market. Contrary to popular dogma, there is no such thing as a bad real estate market. Don’t believe those ninnies on CNN. However there is a bad market to buy or a bad market to sell. What you will find is, markets are cyclical. Your mission is to ride the highs and hedge the lows. You should adjust your buying behavior based on the market that we are currently in. There is a funny thing about real estate markets. On occasions local market trends do not correspond with national trends, and even submarkets inside of local markets may not correspond. What you will see from time to time is that there can be pockets inside of local markets that can be hot or cold based on new development or city initiatives.

• Do your homework

When novice investors look at investing in real estate, they only focus on the physical condition of the property. They will focus on the : roof, foundation, electrical, plumbing, etc. Don’t fall into this web. Think big picture. You need to consider zoning issues, possible tax-abatements that could expire, new development, etc.  All of these things can affect your bottom line.

• Make sure your math is sound

 "Inexperienced buyers may think it’s easy to buy a property, improve it and either lease or sell it. But they often underestimate the time and money it takes to improve the property as well as the time it takes to find a buyer or tenant."

• Assemble a network of advisors

"You need to surround yourself with trusted advisers, including a real estate broker, banker, real estate attorney, accountant, contractor and perhaps a mentor."

Come to REIA Augusta meetings. They happen on the 2nd Thursday of every month at 7:00 P.M. in the Columbia County Library. It is a good way to meet like minded individuals and to network with people who are in the same industry.

-Auben Realty Improving Augusta One Home At A Time