Buying your first property is a unique experience; it is exciting and stressful all wrapped in one. For some people, their dream becomes a reality once they have moved into their new home. For others, it is the start of a nightmare. To ensure you do not fall into the latter category, read on to discover some of the common mistakes made by first-time home buyers so that you can avoid them.
- Buying a property that has expensive problems to fix – Of course, this is not something you would do intentionally. However, if you have not conducted the necessary property inspections and invested in a professional survey, this is something that can easily happen. When viewing a home, you need to look out for problems that could be costly to fix. This includes the likes of rotten window frames, a weak flushing toilet, missing roof tiles, faulty guttering, and damp. The current seller should rectify such issues or you may be able to reduce the asking price by pointing them out.
- Failing to understand what your location really means for your property – From mountain homes to waterfront real estate, all locations come with their unique set of challenges, and you need to be prepared for them. For example, if you choose a home in the mountains, land issues and damage caused by wildlife are to be expected, so you will need to take the necessary precautions and choose insurance that covers this. Flood liability is an issue you need to consider if you want to buy a waterfront property. You then have different problems to think about if you live in a city centre, near an airport, and so on!
- Not thinking about the future – A lot of first-time buyers are guilty of this mistake. They only consider the here and now, but it is important to think about what the area is going to be like in five or ten years. Some questions you should ask about the prospective property to determine what the future looks like include: Have home values in the area been increasing or declining? Are there any plans for buildings on undeveloped land in the area? Will there be a highway built nearby? What kind of development plans are in place for the future?
- Failing to consider additional expenses – When buying a home, you won’t only have the deposit and the mortgage payments to make. There are many different expenses that need to be considered, such as using the services of the top real estate agents. During the buying process itself, you will have everything from property taxes to conveyancing fees. Once you live in the property, you will need to set money aside for any unexpected repairs.
- Rushing into a decision – Last but not least, buying a property is not a decision that can be rushed. If the seller is putting you under pressure, don’t give into it. This is a huge investment, and you need to be certain that everything is right for you. Moreover, by rushing the process, you can end up overlooking things that will come back to bite you in the long-run.
Making money from real estate
Property investment has become exceptionally popular over the years. However, making a real fortune from real estate is not always easy. While you can make a tidy profit from simply buying low and selling high, if you are to find huge amounts of success in real estate, a lot more is required than this. Read on for some top tips.
- Understand the economics – The real estate deals that are the easiest to find and look the prettiest often yield the lowest returns. Examples include joining a crowdfunding website, or buying a property that has management and a tenant in place. Instead, you need to find and create opportunities. After all, the most profitable deals are the ones that no one else knows about. Luckily, you are investing at the right time – there are low interest rates, historically low inventory levels, high consumer confidence, and a strong economy. People feel like now is a good time to buy, rather than retreat into fear and rent, as was the case over the past few years due to the recession. So, if you can find a deal before the competition does, you really can start to make large sums of money.
- Start small – It is always important to start small when investing in real estate. You know what they say; don’t run before you can walk. A lot of people give up their job or sell their business in order to pursue real estate investment. There is no need to do this; you can have both. In fact, it is better to have both, as it means you can diversify your wealth, and you can use your business or career to generate positive cash flow. It is advisable to avoid using all your money if you have never invested in real estate before. Your first property is always a learning curve; no one ever says that their first deal was their best. This is when you will build your network of specialists, learn how to read the contracts, and gain valuable experience.
- Think big – While it is important to start small, you also need to think big with real estate. A lot of people give up on buying properties for the purpose of investment because they don’t have enough money. It is not about the money you have; it is about the deal you make. There is not enough money to be made from the smaller deals, which is why it is better to go big from the very beginning.
- Learn first, then earn – On a final note, it is so important to learn before you earn. It can be so tempting to dive right in because you are eager to make money. However, this is where mistakes happen. You need to educate yourself before you throw money at this dream. But don’t go and spend thousands on seminars and coaches. This really is not necessary. Information is available in its plentiful, and it doesn’t cost a lot either, so don’t feel like you need to break the bank!