Congratulations to you if you have decided to take a plunge in the world of real estate as an investor. It is indeed a very exciting and profitable industry where you can hope to earn high returns on investment with planned and calculated moves. But are you prepared for the surprises that await you in this field as a newbie investor? It can prove to be a very challenging field for those who are not prepared for these surprises.
You will come across people who do not keep their promise
In life, you come across many people who are not true to their word. You stay clear of such people as you know they can harm you. In any other business, you rely on the word of other people. This is how the world of business works. But relying on the word of another person can hurt you financially when you become a real estate investor. Therefore, you need to keep your eyes and ears wide open when starting as an investor. Get everything in writing as word does not matter in this field. Whether it is price of a property or rehab of a house, always sign a contract when everything has been spelled out in detail. Never assume people will do exactly what they say they will in real estate. You will be taken aback by the sheer numbers of people who do not go by what they say.
Value and price are two different things
You will hear about prices of properties, but they do not turn out to be real prices like that of other commodities being sold in the market. You can find out the fair market value of a property, but it does not turn out to be the price you pay for buying it. The price you are told or hear is not the price you pay. Prices are negotiable in real estate and even the seller expects the buyer to negotiate. How much you can lower the asking price is dependent upon your skills and the condition of the market. Motivation of the seller also matters a lot in real estate industry. This is a surprise that awaits you as an investor. However, you can use it as a tool to increase your profits in this industry.
Rehabbing surprises even the seasoned investors
Rehabbing is an integral component of real estate investing. In fact, it is a creative way of adding value to a piece of real estate that allows investors to earn profits. If you are new, it is difficult to estimate the exact amount of money needed to repair a property. You are surprised how much more you must spend on repairs than what you anticipated when buying a property. If you do not want to be surprised on this count, it is advisable to have the property appraised by a professional before going to the negotiation table.
Real estate investing is more difficult than it appears
Experts will make you believe real estate investing is easy and smooth without hurdles. Reality dawns upon you only after you take a plunge in this field. Real estate investment involves a learning curve that can take months of hard work and research before you can become a successful investor. If you are prepared to work hard and learn from the mistakes of other investors before you, you can surely become a successful investor. There is no substitute for hard work and experience in real estate investing. You should take the surprises you encounter as a first-time investor in your stride if you are really serious about success in this industry.
If you’d like to talk more about property management, or you need help with Everest Property Management, please contact us at Everest Realty.
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As a top producing Realtor and Property Manager; Terry specializes in sales, extensive construction homes, rentals, REO’s, short sales, and all aspects of Real Estate. After graduating the University of Michigan with a master in MBA, Terry continued his endeavor and now has over 15+ years of experience in the Real Estate world. If there is anything that has to do with Real Estate and sales, you can always be sure of Terry to provide important, specialized knowledge.
