The real estate market is now on the rebound, so investing money into it seems like a pretty appealing idea. It can be either for a side job or a career. There is always a good way and bad way to go about it, though. Here are ten different lethal mistakes that you can do as a real estate investor.
1. Plan As You Go
If you have a lack of a plan, it can be a critical mistake as an investor. Do not buy a house just thinking it is a good deal, you will not know what to do with it. You first need to have a plan, pick an investment model, and then find the property that matches that model.
2. Thinking You Will Get Rich Quick
Do not listen to “infomercial gurus.” Real estate is not quick, and it is not easy. It is a long-term investment, and you will need to work hard for it and be smart. Willingness to work is the key, and you need to understand the risk tolerance as well.
3. Being a Lone Ranger
To be successful in the real estate market, you need to build yourself a good team of professionals. You should have a good relationship with an appraiser, a real estate agent, a home inspector, a lender, and a closing attorney. You should also find qualified remodeling and maintenance specialists as well to join your team.
4. Pay Too Much
If you pay too much for a property, it can eat away at your profit. This mistake can surprise investors later when they find out that they did not make any money on their investment.
5. Skip Your Homework
There are wannabe real estate investors out there that will not even crack a book before they start investing in the real estate market. You should educate yourself before putting your financial security on the line. Read books, go to seminars, do everything you can to learn whatever you can before investing.
6. Avoiding Due Diligence
Investors move quickly on deals. Even though they move quickly, they still do their research before they sign a contract and write a check. If you buy a property that needs more work done than you anticipated, you can end up being in a hole for thousands of dollars. Make sure to do some research before investing in a property.
7. Miscalculating Cash Flow
If you are buying a property to hold and rent, you need to have some cash flow to cover maintenance. A property manager can take up to ten percent of the gross monthly rent, so if you equate that into the equation, you need to make sure that you are making money having all of your other maintenance expenses as well.
8. Having a Low Volume
When you have one deal at a time, it is doing a transaction, it is not running a business. Make sure you have many prospective deals so you can weed out the bad ones and make moves on all of the good ones.
9. Having No Way Out
Make sure that you have more than one exit strategy when you purchase a property. Do not get stuck with that property. What if the property will not sell or rent? Make sure you have more than one way to get out. Hopefully, you will still be able to turn a profit, but if not, at least you can get all of your money back.
10. You Miscalculate Estimates
After you do your research, you should double the amount of money and time that you think that it will take. That way you know the worst case scenario, and if the deal still sounds good with the worst case scenario, it is probably a good deal.
Hello everybody! Joshua Greyton here! As a real estate professional, I know that many places in the United States are great for living. From the great city of New York to the magnificent city of San Francisco. But for me, there is only one place that I would like to live one day if I had the option, that place is Miami, and more specifically, Sunny Isles Beach.
Sunny Isles Beach
So why Miami exactly? Well for starters, the weather is great year-round. In South Florida, you basically have two seasons in the whole year. It is either really hot in the spring time and summer, or cool during the fall and winter times. Daytime weather will never drop below 60 degrees Fahrenheit in South Florida, so you know you will never be freezing. What else can you ask for? If you ask many residents of Miami, why they chose to move down to the city from their previous locations (which usually include New York and other northeastern cities), they will tell you that they are just tired of the weather up north. That the weather in Miami is the best that they had ever experienced, hands down.
Miami’s Cultural Melting Pot
So besides the weather, what is so great about the city of Miami? Well, where should I begin? The beaches in Miami are some of the most beautiful beaches that you will ever encounter in your life. The nightlife in Miami never stops, and the city is always awake. The people of Miami are some of the most beautiful people that you will ever meet. If you like sports, you have the option of watching professional baseball, football, and basketball in some of the most spectacular stadiums and arenas that you will ever see. If you like music, you can go to one of Miami’s many concert halls to hear live music. If you like art, the Wynwood Art District in Wynwood, Miami will take your breath away. The point of all of this is that no matter what your interest or hobbies are, there is always something for anyone to do in Miami, all you have to do is just walk around the city, and you will find something to do.
So why is my ideal place to live Sunny Isles Beach? Well first off, it is extremely close to the actual city of Miami so with a short drive down, you can find yourself in Miami within no time. But Sunny Isles Beach itself offers a lot of the perks of Miami without all of the noise. You can find incredible beaches in Sunny Isles, without all of the commotions. Sunny Isles Beach has some of the best restaurants with the best tasting foods that you will ever encounter. If you like high-rise apartment buildings, most of the residents of Sunny Isles Beach actually live in these magnificent tall buildings. All of the buildings are relatively new with more upcoming buildings always being constructed.
What Would Be My First Real Estate Investment in Miami?
One of the buildings that I would highly consider moving into is The Mansions at Acqualina in Sunny Isles Beach. The condos at the Mansions are beyond amazing! You have a choice of buying three, four, and even five bedroom condo with multiple different floorplans that will suit whatever taste anyone will have. Just imagine owning one of these magnificent condos in Sunny Isles Beach, walking down, and being in the center of the city with everything being so close to you. These condos are incomparable, and if you have the opportunity to scoop one of these up, do not hesitate, I am definitely looking to purchase one of these soon, and they are going quickly.
Moving to Sunny Isles Beach is definitely just a dream of mine, but a dream that I hope can become a reality in the near future. I would love to move my family to this amazing city and for my kids to grow up in the city. If you are not sure that this is the best place for children to grow up, I can ensure you that it absolutely is. Sunny Isles Beach contains some of the nation’s top elementary, middle, and high schools. If your children grow up and decide that they want to take their education to the next level in Miami, their options are limitless with many different Universities in South Florida to choose from.
Become a Part of Miami’s Growing Economy
If you take my advice and are actually looking into moving down to Miami or Sunny Isles Beach, I can guarantee you that it is the place to be. If you are thinking of making the move by yourself, or if you are planning to move down with your entire family, there is no better time than now. I intend on making the move very shortly, and I know that it is a decision that my family and I will not regret. If you want to live in a city that is filled with life, with different daily activities for you to do, and with hundreds of different job opportunities with a growing economy, do not hesitate, make the move to Miami or more precisely my choice, Sunny Isles Beach.
Real estate investing, even on a very small scale, remains a tried and true means of building an individual’s cash flow and wealth. – Robert Kiyosaki
Are you currently invested in the real estate market? Are you afraid of investing your money in the real estate market? Are you tired of seeing almost no return on your money at the bank? Do you like the idea of seeing results by investing in the real estate market? Here are eight different reasons why investing in the real estate market is an excellent way to grow your wealth.
1. Cash Flow
Real estate investment properties usually have leases that secure the investment. This investment provides an income stream that is higher than it would be had you invested in stocks.
2. Having Leverage to Increase Asset Value
With commercial real estate investing, you have the ability to to use your asset and to place debt on it, which can be a few time the original equity. Having this leverage can allow you to buy multiple assets without as much money and multiply asset value while increasing equity as the loans are being paid.
3. Multiply Cash Flow by Leveraging Low-Cost Debt
By placing positive leverage on an asset, an investor can increase positive cash flow from properties by borrowing some money at a cost lower than the property actually pays out. If you have an income property that generates a six percent cash-on-cash return and have a four percent debt placed on it, you would be able to get paid six percent on the equity and about two percent on the money that you borrowed, having leveraged the debt.
4. Hedge Against Inflation
Countries around the world are always printing money to stimulate economic growth. An income producing real estate property can hedge against inflation. Usually, when inflation occurs and the value of the dollar goes up, so does the price of real estate.
5. Physical Assets of Properties Have Value
As a hard asset, income-producing real estate has meaningful value. The land of the property has value, the structure has value, and the income that it produces has value as well to future investors. Income producing properties do not have green and red days like the stock market.
6. Tax Benefits
Real estate owners benefit from the US Tax Code in several different ways which include mortgage interest deductions and shielding a part of the cash flow that is generated and paid to the investors with depreciation accelerations. When the sale happens, the IRS allows the investor a 1031 provision, which enables the investor to put off all taxable gains into the future.
7. Appreciation of Asset Value
Inflation is a part of the economy, and it can drastically reduce purchasing power. Real estate investments have always provided exceptional appreciation in value that usually exceed other investment types. The value of the property tends to increase in value as net operating income of the property increases with effective management and rent increases.
8. Pride in Ownership
Having the right property that is in the right location the houses the right tenants can give someone great pride of ownership in that property. Take into account that being a homeowner is unattainable for many people, if you can have multiple real estate properties, imagine the amount of pride that you will have.
Hey everyone! My name is Joshua Greyton, and I am a real estate professional. I got into real estate a few years back when I noticed that the housing market is picking back up and figured I can get myself into it. Real Estate is an incredibly exciting field to be working in because it is always changing, so it keeps you on your toes. I enjoy helping others learn what I have learned through my experiences because I believe that for me to be successful, other real estate professionals need to be successful as well. If we are all working together, we can make this business profitable for everyone involved.
Real estate is a very diverse field with many different opportunities. If you want to, you can get into residential real estate sales, making commissions on the purchases and sales for your clients in the residential market. Commercial real estate sales is a little different because you are dealing with the commercial real estate market instead of the residential one. Another field to get into as a real estate professional is property management, where you can make money off of managing other people’s investment properties.
I am here to tell you that the real estate market has countless opportunities for people trying to get involved in it and people already involved in it. I will always try to give you the most honest opinions regarding the real estate market. As a working real estate professional, I believe that my insight can help others reach their goals in this real estate market, and that is why I created this blog. Do not hesitate to ask any questions, I will be happy to answer them.