The current condition of the real estate market throughout North America makes it an attractive investment opportunity. The fact that commercial or residential property is a stable long term investment notwithstanding, economic problems facing property owners make for some great deals to be had. Nevertheless, there are some common mistakes that absolutely must be avoided to ensure that you make money rather than lose it. Some of the key mistakes include lack of research, following inaccurate advice, not leveraging bank funds, and not being able to look after property because of a lack of funds.

Research

One real estate rookie mistake is to plan-as-you-go. Any investment endeavour requires careful planning and research. For example, don't buy a house just because you found a good deal. You want to have an idea of what to do with the property once you own it. In other words, you should first make a plan and then find a good deal on a residential or commercial property that fits your plan. A real estate transaction should be supported by a sound investment strategy, and real estate is not a get-rich-quick game. Take some time to first educate yourself about real estate investment, there are many great books, blogs, and articles that will help you understand everything from buying foreclosures to finding tenants.

Still, research is not just about making an investment plan and understanding how real estate can fit that plan. Even when you have a solid plan, due diligence is a very important factor in making a good real estate investment. Market conditions, maintenance and repairs, and even economic factors in the surrounding neighbourhood all have a huge impact on the benefits of an investment. Ideally, you should work with a team of professionals that can help you research different properties and their ultimate investment potential.

Advice

When it comes to buying and selling a property, there is as much bad advice as good. The media especially is full of so-called journalists offering questionable advice. To avoid this major mistake, you really should speak to professionals with proven experience turning real estate into a winning investment. New home buyers also make the mistake of leading with their heart when they should be carefully analyzing potential properties. Friends and family members may give you great advice about your life, but this does not make them real estate professionals. Always try to keep your emotions out of investment decisions and only base those decisions on proven, professional advice.

Leveraging Bank Funds

In most cases, buying property involves taking out a loan and the best investors know how to safely leverage their bank funds. In the past few years, there have been many instances where homeowners suffer significant losses because they have not leveraged their funds effectively. Sure, if you buy a home for $300,000 with a $50,000 down-payment and then sell that home for $400,000, you've doubled your initial investment and you can pay back the bank for the $250,000 you needed to borrow. But if property values drop, leveraging can be dangerous and you could easily lose your down-payment and more.

So while leveraging bank funds offers potential rewards, there are also potential risks. In short, you need to be smart when you borrow and you also need to manage your cash flow. Not only do you need to cover your mortgage, but you also need cash to maintain the property. Tenants are obviously important for improving your cash flow through rent, but you cannot always guarantee your property will be occupied. If you plan to borrow to invest in real estate, make sure to leave yourself lots of wiggle room so that you don't leverage yourself into foreclosure.

Caring for your Investment Property

A lot of people make the mistake of not giving themselves enough time to look after their investment property. As such, it is important to realize that real estate investment can be a very time consuming endeavour. You must obviously maintain your property, but you also have to have time to deal with your tenants. You might want to consider hiring a professional property manager, but if you plan to look after your investment property on your own, make sure to have enough time in your schedule.

Manish Patel is a Real Estate Entrepreneur and an investor associated with Realestatewholesale. Manish founded IRG Real Estate to advocate the tremendous opportunity in the California/Nevada/Arizona market. Manish Patel precisely diagnoses real estate bargains and works closely with real estate investors to create wealth and capitalize on great deals in the real estate continuum. As a specialist in distressed real estate, he brings insights to distressed sellers to see beyond the conventional ways of seeking foreclosure relief. In addition to this he has excellent oral and written communication skills proven by the ability to successfully manage large projects while working with individuals from very diverse backgrounds.
To read more, please visit here: https://manishpatel.jimdo.com