Real estate is the preferred form of investment for many, but it’s not always easy to know where to start or what challenges to watch out for. Create a strong portfolio that will continue to benefit you for years to come by avoiding these common pitfalls.
Sticking to One Market
Location matters, of course, but as an investor there are other factors to consider. Areas with strong employment in high-demand sectors, like tech, attract high-income households who may choose to rent before they buy. Expenditures matter, too; if some areas have been hit hard by natural disasters that are only increasing in frequency, expect more repair-related expenses down the road.
Relying on a Limited Network
Active real estate investors will probably find themselves frequently relying on electricians, plumbers and other home maintenance professionals. Keep building good relationships with a variety of service providers to ensure that no matter what kind of curveball your project encounters, you have a qualified and trusted person to call for help.
Making the Wrong Renovations
When it comes to making improvements to your real estate investment properties, consider your target buyer, the market and neighborhood, and your own expenses. If you overdo your renovations, you may outprice some renters. If you don’t do enough, you’re likely to be overlooked. By renovating with purpose, you can balance profit considerations and attract the right tenants.
Thinking about expanding your portfolio? Reach out if you’d like some assistance.