Making mistakes is all part of the journey when it comes to real estate investing. Unfortunately, each and every mistake you make is going to cost you money out of your pocket!
1. Not buying the right property
Purchasing the wrong property is going to cost you down the road. It can lead to negative cash flow, little or no appreciation, and can become a money pit for a long time. Do your due diligence up front and don’t buy it if it doesn’t make sense or you will end up regretting it later!
2. Not buying in the right market
You can purchase the best property in the City, but if you buy in the wrong market and the wrong time, you simply won’t be the ROI that you need as a property investor. Buying in the wrong market can lead to negative cash flows and little to no appreciation.
3. Not having the right team behind you
In order to be a successful property investor, just like in any business, you need the right team of industry professionals behind you! Just a few examples of the players that you will need on your team include; a property manager, realtor, lawyer, mortgage broker, plumber, handyman, appliance repair team, bookkeeper, and the list goes on!
4. Trying to do everything yourself
No man (or woman) is an island, and trying to do everything yourself in order to save money and boost cash flow is a surefire way to limit your success when it comes to investing in real estate. In order to scale, you need to outsource almost everything, and focus on the business of raising capital and purchasing properties.
5. Selecting the wrong tenants
This is probably the biggest and most costly mistake that you can make, and you will likely make this mistake many times over, especially if you’re doing your own property management. Bad tenants can cost you tens of thousands in repairs, tenancy board hearings, and lost rent! Do your due diligence up front when it comes to tenants so that you don’t get bamboozled! Credit checks, and reference checks are cheap and absolutely critical!
This list of the top mistakes that landlords make is by no means exhaustive, but should give you some things to watch out for at the very least. If you’re looking for some real estate investment or property management advice, be sure to reach out to our property management and real estate brokerage here.
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