The thought of investing in real estate would have appealed to you at some point, but did you dismiss it because it seemed like too much work? You are not entirely mistaken, if it was as easy as pie, everyone would be doing it. Sure terms like foreclosure, line of credit or mortgages may seem larger than life itself. But like Jeff Adams, the real estate guru assures you, it is not as complicated as you think.
There are a few mistakes every first time investor makes. But don’t you worry. Jeff Adams shares his tips to avoid these common mistakes, so you can make an informed investment.
1. Not Researching Enough
Like anything you are doing for the first time, make sure you do plenty of research.
It is to your advantage that you live in a day and age where the internet makes available, a sea of information. There are plenty of experts in the field, who have simplified the real estate jargon for you. What’s more, they also share experiences of their clients for your better understanding. If you are buying a house for the first time, don’t be afraid to ask a lot of questions. It is likely to be your home in the foreseeable future, so it is only fair you are fully convinced of your purchase. Go out there and network with realtors and other people who have bought properties recently. You are likely to learn a lot from them.
2. Being Unaware of Financing Options
This is what most people find hard or can often get wrong. Regardless of where you are shopping for a home or what type of house you are looking for – when you first hear the sale price it is always going to surprise you. Before you get overwhelmed and wonder if you can afford it, good news – there is a series of exotic mortgage options you can choose from.
Before you sign up for a mortgage agreement, make sure you read the terms and conditions and are well aware of what you are getting yourself into. While there are adjustable interest-only loans, you could lose out if interest rates rise. Ensure that you have the financial flexibility to pay off the change in rates, or the option of converting to the conventional mortgage with a fixed-rate.
3. Not Asking For Help
While the process may seem straightforward enough on paper, it is rarely as simple as that. Experts who have been in this field for years find it difficult to do it on their own. Have a realtor you trust, a handyman, a banker and an insurance broker all in the loop while making this investment.
4. Overpaying for the Property
Get a realistic perspective of how much the property costs. Talk to people in the neighborhood; see how much they have paid for their houses. Take the opinion of your realtor to arrive at a final figure. No matter how nice the house may seem, it is not worth overpaying for. If the final price is above what you estimate the value of the house to be, don’t be afraid to engage in a bidding war.
5. Underestimating The Expenses
The expense of a house is more than just the monthly mortgage payment. It is inclusive of maintenance as well as the monthly living expenditure. The best way to budget for it is to assess how much you think you will need for a month and factor in an additional 20 percent to it.
Our recommendation – if it is your first time, sign up for a course with Jeff Adams. This webinars, books and workshops have been attended by thousands world over and will help you sail through your first real estate investment with ease.
