Arcane Properties

Five Real Estate Investor Mistakes to Avoid

There are ups and downs in real estate investment. Just like any business, buying and purchasing properties have risks of their own. What successful real estate investors have in common is their expertise in avoiding the common mistakes being committed especially by neophyte investors. They are assured of less or zero liabilities if ever the investment climate turns sour at certain times. One of the immediate mistakes a property investor commits is the impulsive decision to undertake a home rehab upon acquiring a house. This move instantly puts figures in the capital expenditures and would entail some troubles if not carefully accounted.

Home renovation costs could be more than expected if the investor does not prioritize the areas of the house that need immediate repairs or remodeling. A wise real estate investor must consider what would give the property added value if home improvement is ultimately funded. It could be bathroom remodeling, kitchen renovation, foundation renovation, or enhancement of home interiors. One of these renovation jobs would be instrumental in appreciating the value of the house.


Poor planning is also a basic mistake in real estate investing. For an individual to have effective planning methods in real estate, he/she must do some self-study and a lot of research. It is only then that a better perspective of the business will arise. Out of many considerations, a well-informed investor can choose which option is most helpful to his/her chosen business. A well-thought of plan will hit the desired goal more often than just doing things through instinct. In the process, it has the advantage of saving on time, money, and effort. Just like remodeling contractors who have plans for every project, a real estate investor should also adapt the same effective business tool. There are also instances when an investor who does not have a clear cut plan on what property to purchase end up purchasing a property when emotionally involved with a deal. This is the third common mistake because emotions must not prevail in business.


On the other hand, not having enough cash reserve is also a possible fourth mistake, like having a stockpile of money for various expenses. The investor has to be ready for the mortgage, property taxes, and monthly maintenance. This is in addition to home remodeling ideas for the appreciation of the property’s value. Lastly, avoid the mistake of expecting the property to appreciate too much in the short term. Just like what previously stated, ups and down in real estate is part of the business.



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