A Look at Some of the Advantages and the Pitfalls of Investing in Real Estate

Knowing your market can be the most critical aspect of your investment plan. Just like when you saw a house that is being offered at an auction and it just worth one third of the appraised value, this does not mean that it is going to be a good investment.image 30

Maybe the house needs an expensive repair, or it might need a new roof, or costly foundation repairs. Or may the house may even have some mold problems. These problem can lead you to invest more time and money than you really want to put into an investment property.

If you are going to buy a property that it needs an expensive repairs, you also have to think about the property’s neighborhood. If they are going to support the value once the property repair has been made. The surest way to lose money in real estate is to overbuild for the neighborhood. Get to know your market. It is critical to your success

If you now know your market, then you can already determine what is and what is not a good investment. You will know how long it should take to sell your potential investments. A good real estate agent can actually help with this type of information.

He or she can tell you how long the properties have been on the market, what the listing prices were and what they sold for. With an agent assisting you with your purchase, you can save countless time of researching. And of course their serves are usually no fee.

If you are really serious about your real estate investing, then it is highly recommended that you should establish a working relationship with realtor. Investing in real estate is not just a part time job, because if you put your effort into it, then the rewards will be so amazing.

There are many advantages in investing in real estate

One the advantage of investing in real estate is, real estate is an investment that can give you income for the rest of your life. Just like when you buy a property and have that property be rented out; with that, it can actually give you a life-long income. Another advantage of investing in real estate is you can use a lot of leverage to acquire real estate.

image 37If you are short of money, there are many ways that you can buy real estate without using your own money.

A one way of doing this is by selling your financing. Seller financing is when you agree to pay the seller over time the down payment and the rest, you get from the bank.

Investing in real estate has a perceived value to it so this can be good or bad depending upon the market. A stock that you buy can lose 99% of its value, but it is almost impossible to buy a property, and it loses 99% of its value.

One disadvantage of investing in real estate is if you buy a property and can’t make the mortgage payments you can lose the property and damage your credit, another disadvantage of investing in real estate is, as an investor you depend on a lot of people to do their part.

If the people you are renting out to don’t pay their rent, you will have to use their security money and find new people quickly, or it can eat up your profits. Before you jump into the real estate industry, you just need to learn about the pitfalls to avoid risk so you can have a happy and fulfilling career.

Author: Sara Mathis

I am a Sara Mathis a newbie in the real estate industry in Cedar Park, Texas.