What are the most common mistakes in an investment?
When you make a property investment sometimes you've got to commit some mistakes that can to compromise quite good success dell’operation.
Sometimes, indeed, even if you have chosen the area well and property, it may happen that your investment goes up in smoke because the same "ruined" by other bad choices.
This article will explain what are the errors Most common who commits those who decide to investing alone. Here then is a list of 5 mistakes to avoid that can cause you serious issues and provoke the big losses capital (or gain).
1. Making choices subjectively
A frequent mistake is to take decisions subjectively, ie using parameters that have to do with own personality.
This is a mistake that must be avoided!
You have to be clever in distinguish the decisions taken following the’personal opinion, instead of those dictated by 'professional experience.
You do not buy a house, you have to make a deal!
In each stage you will need to put in the shoes the prospective tenant or buyer, leaving aside your taste in location, kind of house, furniture and home accessories.
In this industry it always says: “Lovers of the deal, not the house!”.
Pensions in questo modo: you're buying an asset to improve it and sell it.
The fact that a house can trarti deceived, because it is something that everyone in life we have to do. There is money, It is not a financial product, it is good that you see and touch, that can please us or not. And this is to influence us.
I give you an example: a beautiful house in a central location will attract you for sure, but perhaps your opportunity to gain It hides in a building a little 'ugly suburban.
Always take any decision relating to your investment in an objective way.
2. Do not buy good
Here's another common mistake committed: buy a wrong price.
Again, there is an ad hoc phrase used by industry experts: “The real deal is made when you buy not when you sell”.
You must be able to buy a property that is worth the asking price. Even better, you have to be able to buy it at a price below the average of the area market.
This does not mean that you have to choose the property with the lowest price ever.
Even because, often, behind a low price are concealed technical or legal problems.
Rather: you have to buy at a good price for the area, making sure that there are no problems and that revaluing the property will get a important gain.
It is not easy to see if the property in front of you really worth the price asking you the seller. You must know how to evaluate its real market value and you can only do by knowing well the prices of the zone and features from property.
When you buy do not think the performance of the market and prices: Your investment must be safe and profitable regardless of the time.
You have to study in detail not only the house but also its seller. For your gain will make much difference to deal with a motivated seller, that their needs must sell soon, instead of one that does not have the same need.
Buy a property that is worth the asking price and allow you a high gain.
3. Not knowing how to conduct negotiations
To achieve an investment property are also used type skills commercial: you have to know how to set up and conduct negotiations strategically and professional.
Knowledge and experience are in this case your trump card.
It's true, Also the personal attitude plays an important role.
Many people have an innate predisposition natural approach and open with others, but this temperamental inclination It is refined and transformed into a true industry expertise.
To conduct the most of a negotiation you have to know all the technical and the "tricks" typical of a dealing.
Consider that in a real estate investment, there are many times when you're dealing with a counterpart and in which an exchange must take place under these conditions: both of you will have to conclude the agreement having obtained the expected value.
In a real estate negotiation each party must in fact feel that they have reached their goal, without thinking that the other has gained at his own expense.
Learn the secrets of negotiation and lead your true expert talks.
4. Be in a hurry
It may seem a concept obvious and banal but, believe me, it is not.
The speech is related to subjectivity: if in the course of an investment you let yourself be influenced by subjective choices you commit mistakes due to haste.
You can fall into the trap of care at any time: you study the zone to choose the right one, when you visit the property to select the best, when evaluating the price and purchases, when you restore and resell when the tenant or circles.
The hurry of close the deal, or lose one that I was interested but then does not prove profitable, You can make you make wrong choices and you also lose your capital.
If a deal fades do not lose heart: real estate business there are always and everywhere, just know how to find. If you understand that a real estate transaction will not give you good results you have to know when to stop and roll up your sleeves to look for another.
Even the expectation of gain may make you take risks: be patient and always shiny.
Never be concern: It respects the time of each step and think carefully about every decision.
5. Do not rely on professionals
Whether you choose to invest on its own or be guided by an experienced team, at every stage of your investment you will have to do with economic aspects, Legal e technicians.
You'll have to necessarily turn to the professionals to attend to all paperwork and solve problems of nature:
- technique (quantity surveyor)
- legal (legal counsel)
- economic and operational (an expert like real estate consultant).
If you are a professional who specializes in one of these materials, so be it! But you can not be an expert in everything and you will therefore need other figures at your side.
To learn more check out this article on I 3 experts that you need to invest.
Rely on the good professionals to manage the economic aspects, legal and technical.
These are some of the major mistakes when investing in real estate. I can not deny to have them made too, in my time. Today I share them with you in the hope to make you understand what are the best ways to invest in security.
Do not underestimate what could cost you, in terms of risk and money, do your own investment. Currency of you guided step by step to avoid overlooking any detail, not making any mistakes and get the Gain you want.
If you want more information about how to do Real safe investments you read this guide with our advice for beginners to invest in real estate.