Investor Mistakes
- Leaping into real estate without a plan and vision.
That’s like starting a business without knowing what product or services you’re going to sell.
- Thinking that you do not have enough money to invest.
Even though interest rates are starting to increase, there are still good loans where you do not have to put 20%-30% down, but remember, if you’re putting less down, your monthly mortgage will be higher, and keep in mind you must be prepared to sustain a negative cash flow for a period of time.
- Turn property too quickly
When appreciation is high, often people tend to want to buy real estate and sell it quickly to turn a profit.
- Focusing only on active income.
Most of us never forget to think about our active income from our 9-5 job, but we often fail to pay attention to our passive income streams, such as money that can be generated monthly from rentals.
- Not building a real estate team.
Surround yourself with the best experts from the real estate agent to the financial planner.
- Spending your return on your investment
Take your hand out of the cookie jar. If you have a positive cash flow, evaluate where the money should go. Consider taking some equity and combining the positive cash flow to reinvest in anther rental.
- Expecting a positive cash flow from all real estate investments
When you calculate cash flow, appreciation, loan reduction and tax benefits, including interest write off and depreciation, having a negative cash flow is not necessarily a bad thing sometimes.
- Not diversifying your portfolio.
Apartments, condos, single family, land, if one market s not performing well, you can still rely on the other real estate investments”
- Not understanding real estate tax benefits.
Depreciation, interest write off, exchanges”
- Not sticking to your desired outcome.
Stay committed to the end, keep the vision and plan firmly planted”
