Date Posted: 2012-05-25 02:21:32
Site Posted: Myproperty.ph
Traditional knowledge tells us that real estate is a very lucrative investment because of the potentially huge return. However, common sense should also inform us that in order to ensure success, we need to learn as much as we can so as not to lose more than we stand to gain. Here are some of the most common mistakes committed by people who are investing in real estate for the first time.
Not knowing your goal
You have to recognize your purpose for investing; nobody invests just to earn more money. It can be because you are trying to put money away for retirement, maybe you just want a steady cash flow or you are trying to financially sustain your existing business. Either way, knowing what you want out of your investment will help you choose where to put your money to reach your goal. It also provides you with a time frame for whether you need the return in the next few years or in 15 years.
Focusing on just the price
Real estate investing is not just a numbers game; you can’t base your choice solely on how much a property costs. A lot of factors determine the present and future value of a property, location being at the top of the list. If you want to make sure that the house or condo for sale that you invest in will earn you big money in the future, you have to pick a property according to factors like the right neighborhood, area demographics and zoning.
Being too cautious
When first-time investors research about real estate, they realize that it’s not as simple as they thought in the beginning. Unfortunately, this is also the reason why a lot of people get too scared to take that first step. Their fears may range from overpaying, the sudden drop in real estate value, or not being able to locate good tenants on time, if at all. Although these fears are valid, it’s also important to know that you can’t start discovering the potential of real estate until you try it. That’s not to say that you should pull the trigger blindly; do your homework, ask an expert for help and start small if you want.
Flying solo
It would be near impossible to find continued success in the real estate world without making a few connections. By working with people who know their way around the business, you enrich your knowledge about how real estate works, and you are also able to keep abreast of the changing market conditions. Everyone in the business has a certain specialty; what you have to do is find them, get to know them and ask them for help.
Making a mistake when diving into a new venture is inevitable, but there are ways to avoid them, or at least keep their effects to a minimum. Keep these points in mind in order to take advantage of the financial gains that Philippine real estate investing can offer.
Jillian Cariola, Writer
(cover image by Gorilla)
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