There are some common mistakes rookie investors make and they are the mistakes that you should definitely avoid. These are the kinds of mistakes that keep you from even investing at all.
You may have been a procrastinator in high school and/or college but it’s time to leave those bad habits in the past.
You might be thinking that you’re too young to start investing or that you don’t have enough money and while that may be true, there is literally nothing keeping you from starting to research the market and educate yourself on the ins and outs of the business.
You can’t wait to start your education until you feel that you are old enough and you have enough money to start investing. Your education needs to begin now because it is the longest and most-grueling aspect of your investing journey.
However, investing in your education is one of the smartest things a rookie investor can do and, considering you’re reading this article right now, you’re already getting started!
Remember when you fail to plan, you plan to fail.
2. Not Asking Questions
If you want to learn the ropes to real estate investing, you need to ask lots of questions. This isn’t the time or the place to act like a know-it-all.
Before you actually start investing, you can start going to networking events where you’ll meet people who have been in the business for a long time and they’re likely to answer your questions because they’ve been exactly where you are right now.
It is also important for rookie investors to find a mentor. Your mentor will guide you through the process of investing.
This goes for buying properties too. You can’t be afraid to ask questions about the property before you buy it. Bringing a professional inspector and/or contractor that you trust will help you determine exactly how much the property is worth.
3. Equating Investing to Gambling
Every investment has its risks but it should not be the same as gambling. It would only be the same as gambling if you were to blindly pick a property at random to invest in. This should not be the case.
Before you buy a property (or make any kind of investment) there needs to be a good deal of research that goes into it.
This is one of the greatest aspects of real estate investing. You don’t have to guess or gamble. Though you will never be able to know all of the numbers completely, if you do the proper research, you can come pretty close.
This doesn’t mean that there won’t be any risks. It means that you’ve chosen an investment (after a long period of research) that has the lowest risk. It’s all about being confident and comfortable with your investment, not picking one on a whim.
4. Following Their Heart Instead of Their Head
Let’s say you’re buying a home that you plan to raise your children with your spouse and maybe a few dogs and cats. If this is the case, you’re probably going to buy a home that feels right. It’s okay to follow your heart in this case because it’s going to be your home for a long time. However, investing isn’t like buying a home for your family.
Buying an investment property should not involve the heart at all and you should only rely on data, analytical research, and common sense.
Emotions don’t matter. Only numbers are important when it comes to real estate investing.
If you find a property that you love and you feel deep down in your heart that you will make a profit on it, you’re setting yourself up or failure.
It is important to only buy a property after you have researched the neighborhood, school system, public transportation, mortgage rates, unemployment rates, etc. Real estate investing is all about economics and data.
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