Real estate investors tend to make similar common mistakes real estate investing when beginning their journey to live life on their terms. We’ve noticed common trends and thought we would put it out there to help investors, like yourself, know what common mistakes to avoid!
This is the most common mistakes real estate investing that we have noticed. Are you sure that project will be done by then? What’s your back up plan if it’s not? It’s important to schedule your time as well as your money effectively. For example, if you planned on flipping a house and quickly putting it back on the market, are you sure it will be sold in the given time frame that you had originally thought?
Because if it doesn’t, you will have to cover the monthly fees associated with that property. So, the saying, “time is money” is especially true when it comes to real estate. This common mistake of not scheduling time properly has a habit of costing investors thousands. Learn from their mistakes, you always want accurate timelines with moving room that is suitable to you and the market!
You can’t become a brain surgeon without years of education, but with real estate, there are so many real estate investors that dive into this industry without knowing the basics of the obstacles that can come up. Because the investor will be dealing with their own money, its especially important for them to take responsibility of their own finances to make sure they do well.
We noticed this is a common mistakes real estate investing. Investors need to research into expenses, timelines, market trends, as learning should be a full time gig itself. You can never learn too much about real estate! Investors need to make sure they give themselves enough time to build confidence in the knowledge they gain, so that they don’t freeze in difficult situations that arise in real estate investing.
New investors especially don’t realize how important it is to screen prospective new tenants. This is the person that you will be relying on for consistent monthly payments, in addition to also trusting them with your property. You wouldn’t trust a stranger in your home so why would you trust a stranger in your investment property?
It’s important to check their credit history, their referrals from past landlords, as well as at least one meeting with them. We recommend meeting a prospect in person, as this will weed out prospective tenants that do not care enough to show up and will give you a better sense of who that person is, and how they will treat your property.
We recommend also a detailed pre-screening phase so that you don’t have to waste a lot of time on showing the property to every tenant. This way you can find the ones that are the most interested and dedicated. Which is a great quality to have in a tenant!
Here are some basic questions that are great to ask in the pre-screening phase, so that you as an investor can get a better sense of who the prospect is:
This is a lot to ask, huh? A great way of doing this that a lot of investors are utilizing, are online surveys. This helps tabulate closed ended answers that the prospects give, so that you don’t have to!
It’s a great idea to get to know the prospective tenant, however many investors, especially new ones take it a step too far and ask questions that can be considered discriminatory, such as asking about their race, sexuality, what country they were born in, religion, etc. Ignorance is not considered an excuse for laws for screening tenants, so it is important to learn what to say, and what not to say beforehand.
Things happen unexpectedly all the time in real estate. It is important to take into account all of the possible outcomes of each state of real estate investing. When an investor is new to the business, its obviously hard to account for all of the outcomes beforehand and they are bount to run into this common mistakes real estate investing. This is why it is important to learn as much as possible before making the leap.
Learn from other investors horror stories and learn ways to avoid the mistakes that others have made. This will help you, as an investor, know what to do in situations that aren’t working in your favor. These are bound to happen, but it’s a fantastic plan to have a backup plan so you can get right up when you make your first, second, or even third fall.
To us, failure is not permanent. There are always going to be hardships, with whatever venture you set yourself towards. The important thing is being able to get back up and believe in your own ability. This is why a backup plan is a great idea. It helps provide a sense of security, so nothing is much of a surprise.
Getting involved in real estate is hard enough, but it can seem unbearable if you don’t have a good team to back you up. Real estate agents, contractors, property managers, mortgage brokers, there are so many people you have to interact with and its impossible to learn if everyone has the best intentions. Sure, there is the backup research you can do. But when you have so many other things to do, finding people that you can trust is a frustrating and time consuming ordeal.
This is a massive mistake many real estate investors make. We’ve heard horror stories of contractors abandoning jobs half way through or major conflict over financial compensation for projects. This is the biggest factor that causes investors to lose hope.
This is why Rock Star has a directory of tried and true companies that will help you succeed with your real estate venture. Our members have exclusive access to this directory that helps them save a lot of time as well as money, letting them focus on the exciting journey of their real estate investment rather than the nitty gritty of it all.
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CHOICE #2: If you live the the GTHA and are interested in learning how to get more involved in real estate, you can come visit us in-person at our next FREE Real Estate Training class. We take reservations on a first come first served basis, to get more details, click here. Act fast, we have limited seating available!