Common Real Estate Pitfalls That Trap Newcomers

by - 5/29/2017 10:50:00 PM

Real estate is always a booming market that is just waiting to be explored. However, many people go into it unprepared and, as a result, end up with a lot of nasty debt and bad experiences that put them off ever trying again in the future. After a couple of failed real estate projects, it’s natural to want to back off and never try again before you waste more money, but this article will show you where you’re going wrong. Here are four common real estate pitfalls that manage to trap most newcomers, and how you can avoid them from ever causing damage to you.

Buying Old Properties

When we see cheaper properties, it’s almost natural to assume we’re getting a fantastic deal. Imagine an old property that is close to the city centre and surrounded by public transportation and amenities, it sounds fantastic right? Sadly, if it’s an old property with a lot of structural damage, then don’t be surprised when you hear the entire building is covered in asbestos, has rodent or insect infestations and needs to be completely cleaned out before you can make it habitable. Don’t neglect the importance of examining a property thoroughly before investing in it. There aren’t many steals in the real estate market, so don’t go around assuming everything with a low price tag is a bargain.

Neglecting Hidden Costs

In addition to older properties costing more to maintain and renovate, there are also some hidden costs that you may need to consider. For instance, if works you want to carry out will damage or harm the environment, you may need to pay additional cleanup fees. This is known as environmental due diligence and it’s something that traps a lot of new real estate investors. They buy a property and start plans to renovate it, but they’re hit with exorbitant cleanup costs as a result and they make almost no profit once the property is finally sold. There are ways to minimize the impact, and you can read more about environmental due diligence advice from Argyllenvironmental. It’s an important step to take in any real estate plan, so make sure you do your due diligence!

Forgetting Research

This seems like a real estate basic, but you’ll be surprised at how many people fail this simple step. You need to make sure you understand the real estate market in your area before you undertake any projects. This is because you need to know the audience of home buyers and tenants, and you need to be able to appeal to their interests instead of fumbling and developing a property into something they don’t want. The best way to gather information would be to research online or take a peek into real estate agents in the local area and see what types of properties are hotly contested.

Hopefully, these three critical pieces of advice will go a long way for your real estate venture. Remember that it’s important to have a plan and to take it slow. Don’t rush ahead because you’ll be trapped by hidden fees, failed sales and a lot of stress.

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