It would be fair to say that real estate is one of the safest areas you can invest in. Sure, there might be times where it’s hard to keep the faith, but over time values tend to rise and this simply enhances your initial investment decision.
However, due to the complexity and the amounts of money involved, it can be easy to fall into some common traps. Someone who has seen countless investors fall foul of these is Al Hartman; an expert with vast knowledge of the Houston real estate market.
Through the course of today’s post we will take a look at some of the biggest mistakes that Hartman has witnessed from the real estate market, so that you don’t repeat them.
Mistake #1 – You don’t research
This first mistake tends to involve investors thinking with their head, rather than their heart.
You might see a photo of the “perfect” property in Houston, with the white paint still drying on the newly renovated walls. While this might “look” the best proposition, from the point of view of an investor it’s one that probably isn’t going to make you much money. You are paying a premium for these renovation works, and there is little scope to improve this.
At the same time, make sure you research the local area. See a lot of for sale signs? A lot of older cars? It might suggest that the area is less than affluent – which might play on some investors’ minds.
It is small things like this which might appear to be irrelevant, but they can affect your investments over time.
Mistake #2 – You limit your market
If we hone in on Houston for a moment, few would disagree that the market is gigantic. It means that limiting your reach to just a small portion of this market is asking for trouble. Desperate for that apartment in the city center? That’s great, but so are a lot of other investors, and it’s not necessarily going to make you as much money as other regions.
Houston is one area the rural places attract significant interest for the simple reason that the best schools are out there. Not only that, a lot of the major shopping malls seem to be based out of the center, which again fuels interest in the regions outside of it. Don’t focus on the “fashionable” areas of the market – broaden your horizons so you take everything into account.
Mistake #3 – You do everything yourself
In some ways, this is admirable, but in a market like Houston there is absolutely no need. There are now so many real estate management companies that the DIY approach just costs the investor valuable time which can be better spent elsewhere.
Sure, you might pay a little more to have someone manage your property for you, but you will at least get any renovation or repair work completed quickly and more importantly, correctly.