Some real estate investors are unlucky with a part of their portfolio. A freak weather event or an out-of-the-ordinary global event could lay waste to all their careful preparation.
Yet, often the reason a real estate investment fails is down to the investors themselves. They make errors that end up costing them dearly. Here are some to watch out for:
Not thinking things through
If an opportunity seems too good to be true, it usually is. There is likely a reason that no one else has snapped up the “bargain of the century” you are keen to grab. You may need help to uncover those reasons and it may take time to do the research but it is not something you should skip.
Picking the wrong partners
Just because someone has money available to invest does not make them a good partner. Do not be so desperate to seize an opportunity that you jump into a partnership without considering the full consequences of a partnership with the particular person. Also, remember that just because someone is a good friend does not mean they will be a good investment partner.
Failing to realize the work involved in managing a property
Buying a property is just the start of things. Let’s say you purchase an office block with the intention of renting out spaces. Are you prepared to handle all the admin that will involve? Are you prepared to chase late payers, or revise the appropriate laws you must comply with? Hiring someone to manage things for you is an option, but finding the right people can be challenging.
Despite the difficulties, investing in real estate can be lucrative. Just be sure you understand the legal implications before signing anything.
