Monday, September 19, 2011

Avoid Common Real Estate Investor Mistakes

REAL ESTATE INVESTORS 

Investing in real estate can be profitable, but owning rentals is time-consuming, expensive and challenging. 

Real estate investors should get educated, plan and AVOID MAKING COMMON MISTAKES:

AVOID INVESTOR MISTAKES

Mistake 1:  CONFUSING A CHEAP DEAL FOR A GOOD DEAL

Investor should research the market, know your competition as landlord, and make sure you can rent out the property at range price after buying. 

Mistake 2:  OVERLOOKING KEY COSTS

Investor buyers should factor in buyer closing costs (three to six percent), costs to fix up the property, costs to maintain and holding costs.  Then add profit you expect to make, closing costs on possible sale, and determine what you should pay for the property.

Mistake 3:  Forgetting that TIME IS MONEY 

Investors lose money when the property is empty, and you need to make sure you cut down on vacancy time and get a valued tenant quicker while accepting moderated rent. 

Mistake 4:  ASSUMING YOU WILL SIT BACK AND WATCH THE RENT ROLL IN

Landlords are rent collectors, and if tenants have financial problems and stop paying rent, it can take several months to evict them.  An investor landlord needs to screen prospective tenants carefully or pay a manager to do that. 

Mistake 5:  UNDERESTIMATING REPAIR COSTS

Investor landlords must make property repairs, including carpet cleaning and replacement, repainting, roofing, and others.  Some managers set aside reserves of six months of rent money for possible repairs. 

Mistake 6:  ASSUMING THAT OWNING A RENTAL IS THE SAME AS OWNING A HOME

In some states, counties, and cities, they have strict laws for landlords, and a property manager can handle most of these challenges.  Investor landlords would pay for finding and screening tenants, or hiring a local REALTOR to do that, and also up to 10% of monthly rent for management fees.

_____________________________________

Contact us at 949-854-7747 - or ExploreProperties@gmail.com - if you want real estate investor information about ORANGE COUNTY, CA, or that for local property managers.

Source of some information is "Six Mistakes Housing Investors Make" - at www.wsj.com.  This is for information only about investing and not the providing of legal or tax services.  Investors should consult with a lawyer or income tax professional prior to making an investment purchase.

Posted via email from Explore OC Homes

0 Comments:

Post a Comment

Subscribe to Post Comments [Atom]

Links to this post:

Create a Link

<< Home