Mistakes To Avoid When Buying Houses
Whether your investing focus is on generating cash flow or capital gains, it’s common knowledge that one of the safest places to invest your money is in real estate. Think of it like this: if you ask your stockbroker how much they are prepared to lend you to buy $300k worth of stock, you’ll probably be disappointed at the answer. On the other hand, lenders don’t take too much persuading to lend you money to purchase property.
Making mistakes is part of the learning process, and some of us are still making the occasional mistake today, although everyone who invests in real estate has made at least one mistake in their career. Learning from your mistakes and moving forward is really all you can do, and the following article will explain to you the three beginner mistakes to avoid when buying houses.
Buying property at the wrong price is the biggest mistake that many people make. If the real estate market is hot, many investors buy at a certain price and tend to see real estate as something speculative. However, it can be a short sighted approach to investing, if you are buying because you expect house prices to rise significantly. Most of us have seen markets in which house values decreased almost as fast as they went up, and because this strategy relies heavily on perfect timing, it doesn’t always work as you expect it to. Profits are made on the front end and not when the property is sold.
Although not having a buyers list is a mistake many beginners make, it’s also surprisingly common for many seasoned investors to make this number two mistake. A buyers list is a list of people, wholesale or retail buyers, that you have already determined are willing and able to buy property from you, and although it sounds simple, having this list makes all the difference.
The goal of many wholesale buyers is to sell the property to a retail buyer, and many wholesale buyers don’t want to have to do any work before turning round and selling the property, preferring to buy it in ‘as is’ condition. The ultimate end buyer is the retail buyer who buys the home in a condition ready to move in. The MLS properties you’ve seen are mostly aimed at retail buyers.
Good investors have a predetermined strategy for selling a property after they have purchased it, often referred to as an exit strategy, and the third mistake is not having one of these. An example might be a plan to sell a house that’s been split into four units in 30 years, after the property has been paid for by the tenants. Buying a single family home at a discounted price is another example of having an exit strategy. Selling it wholesale to another investor who wants to make a larger profit by rehabbing the property would be a part of that strategy and would also avoid the first mistake we looked at.
You have a much better chance of being successful in real estate investing if you avoid these three beginner mistakes when buying houses. Avoiding these three key mistakes can save you a lot of money as well as a lot of time, although it’s important to remember that you’ll probably make other mistakes along the way. Everybody does.
We are Huntsville House Buyer, and we have bought properties all over the Huntsville area by following these tips and avoiding those three common mistakes. However, you can be based in any area of the country to benefit from the tips above. Over the years, we have come across quite a few secrets of successfully buying houses, and rather than keep them to ourselves we would like to pass them on to other investors to help them succeed.
You can visit us online at https://www.landmarkpropertyinvestments.com to get more great ideas like these that will help you to get the most out of investing in real estate.