Mistakes are inevitable in life. Real Estate investing is definitely not exempted to this rule.
In this article, we list down some of these investment mistakes. If you are new to this industry, be sure to avoid them!
Mistakes to avoid as an Investor
1. Not Starting As Early As You Can
The big question: is it ever too late to invest in real estate?
While the answer is no, it wouldn’t hurt to start as early as you can if you have the means and resources.
Building wealth through investing takes time. That is no secret. When you dive in early, you’d have more room for learning and experience.
What is the next best time? Now.
Now is always the next best time.
Your money won’t grow on its own, unless you do something about it. Start researching now.
Talk to the right people.
They can help you gain a deeper understanding of Real Investing. Find something fundamentally sound. Get started.
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2. Not Getting Over Your Doubts And Fears
Have you heard of the saying “Doubt kills more dreams than failure ever will?”.
Don’t let doubts and fear get in the way of taking position action! The worst thing that you can do to yourself is paralysis by fear.
There is an opportunity cost to inaction.
3. Set the proper mindset
Setting the right mindset means setting manageable expectations. We may sound like a broken record saying that all the time but it is the answer to being a well-versed investor.
You should know by now that not every investment will work out. That shouldn’t deter you. So, be mindful of the way you process information.
Imagine your investment journey as a marathon.
If you are running one, you wouldn't want to spend all your energy getting ahead in the first half of the race only to tire out and fall out of the race from exhaustion in the second leg of the race right?
You will want to plan out your race, pace yourself and go the distance. Apply the same principles to when it comes to Property Investing.
4. Establish A Concrete Strategy
Lack of research and understanding of the market trends may lead to careless decisions.
Discerning between good opportunities and the ones that only want to sell you a piece of land just for the heck of it will be the difference between success and failure.
Map out a plan and follow it.
It doesn’t matter whether it is for stock or real estate.
The parameters you set in place when you were creating a plan are there for a reason, do not diverge from it unless there is really a better reason.
Approaches don’t work if you don’t follow them.
5. Save all the gains and profits
Did you make money in your first investment?
If Yes, that’s good news!
Is it time to spend that hard-earned money and celebrate to your heart’s content?
Not yet. There’s a time for that, and definitely not when you’re only just begun in the game.
Seasoned investors would tell you to roll out the initial profits you’ve gained and solidify your wealth around them.
Use your profits exponentially! Growth is long-term. It doesn’t happen overnight.
6. Account for all costs!
Real estate investment entails costs, but most investors are not fully aware of them. Take time and pay close attention.
Expect certain fees and account them.
You might be charged with holding costs, closing fees, processing fees and other sorts of utilities.
Sometimes, investment firms hide or overstate these costs to make a quick buck because people seldom pay attention to them.
It is crucial to note them as these costs eat away at your potential gain.
Have you ever considered the costs you’re shelling out when you sell and buy stocks?
They exist. Even the trading fees may have implications at the end if you are not aware.
Talking to the professionals and read about this topic widely and extensively. This is an area that you really need to pay attention to.
7. Do it with others!
There might come a point when you’d think you can do it all on your own.
But, why spare yourself from expert guidance and assistance when getting help means it could potentially free you from stress and legalities?
This is true most especially when you’re attempting to purchase a home without anyone.
There are many seasoned investors and well-known communities with solid background, knowledge, and experience that you can rely on.
8. Continue learning!
Determined real estate investors just don’t stop learning. It’s a never-ending cycle.
One way of learning about the real estate market is to study how a country like Singapore attracts both institutional real estate and private equity investors.
You would want to invest in a region where there’s political stability and resilient currency, for example.
Keep yourself up to date with global cues where there’s actual great potential for growth.
When you’re in the know and aware of what’s happening, success comes easily. You just need to know where to look and be willing to adapt to changes.
The latest technologies can be your leverage as you keep yourself educated with emerging trends and companies involved in real estate.
Read up and stay curious about the global situation in the real estate market. You stop growing when you stop learning.
9. Expect big
It’s not that you should set far-fetch expectations and goals beyond your means and capabilities, but never think too small either.
When you have a long-haul investment planned, and your eyes set on the future, the probability of taking bigger returns are just on your fingertips.
Because you have established a concrete strategy, as we’ve discussed earlier, you can be bolder with the risks you take so you are not limited to small investments.
That said, you should be willing to take on larger projects and investments.
Even if you take multiple small projects on the side, you should have a big-picture mindset where you’re already thinking about where to put your earnings and proceeds next.
Be intentional with your choices and have an expectation to grow your assets exponentially.
10. Include an exit strategy
Exit strategy is absolutely critical to unlock existing cash value from your property.
While we want our investment to prosper and gain skyrocketing profits, this isn’t the perfect world. You should be prepared for the possibility of losing some.
Some people resort to selling their stock as soon as it drops to 3%. Others stick to their investment no matter what.
The decision lies on your hand. Are you in this for short or long term? This should give you an idea on handling your investment.
The market may shift downward, and it could be risky. Do you have a back-up for this?
The most seasoned Investors have an exit plan as soon as they enter into a new investment. You should have it too!
Building your wealth
Before you cut a check for your first home or purchase that condominium place everybody’s raving about, do careful research and plan your investment accordingly.
Stick to your established strategy and weigh all the pros and cons to see if they fit your needs, budget, and investing approach.
Build your wealth around the buying and selling discipline you will learn from experts and professionals, from your due diligence and studying, and out of your own experience being exposed in the real estate industry.
If someone tells you to pay only a small percentage now for an investment that returns more than 10x in just a few years, this should already raise red flags for you.
There’s no singular answer to many questions that first-time investors have.
These steps will guide you wisely, intentionally and purposefully, get connected with the right people.
How smart are you financially and do you have the necessary financial IQ to ride out this coming recession?
Click Here To Take Our Smart Quiz!