Each rental property investment begins with the clear intention of making big bucks. However, while doing so, sometimes certain key issues are overlooked by investors. This can be the deciding factor between profit and loss. This is the reason why out of many potential real estate investors, only a handful of them earn real money with real estate investments.
National Reality Investments Advisors LLC, a renowned name in the sphere of profitable rental properties explains the most common mistakes made by investors and also shares tips to avoid these common pitfalls. Let us take a closer look at what NRIA experts tell us to avoid while investing in real estate:
Skipping the Inspection Process
When it comes to real estate investment, there is a process of near endless check writing. There are several expenses and sometimes investors try to save money by skipping few things. One thing that is often overlooked by first time investors is the inspection of the property. The fact remains that it is one of the most important steps of real estate investment. When you are buying a property, you must get it properly inspected by an inspection officer. A professional analyzes the property and gives you the overview of the overall state of the property. The inspection includes any illegal additions as well as safety issues related to structure. You might save a few bucks initially by skipping the inspection process but in the long run if certain issues arise, the cost implication pertaining to maintenance and legal course are ultimately much higher.
Buying Busted Bargains
When buying a home, if a property is available for a bargain, it may not always be a good deal. There are several factors that must be considered, these can hurt your profits at the later stage if not checked earlier. Rather than speculating the marketability and profitability of the rental property, due diligence in necessary by looking at similar properties in the neighborhood. This would offer you the exact picture and ensure a good deal.
Ignoring Maintenance Costs
As already discussed, buying a rental property involves several components and often investors tend to underestimate or ignore one of the most crucial aspects i.e. post-buying cost. Maintenance cost can really be stressful if it bills beyond your expectations. Rental houses often require regular upkeep, which is why one should always account for these expenses firsthand.
Apply for FHA Loans
FHA loans used to be the first option for homebuyers, but over the last couple of years the interest of investors has shifted toward conventional loans because of the pricier and less appealing down payments of FHA loans. A conventional loan these days is generally less expensive for homebuyers, which makes it a better option than FHA. Another aspect that makes FHA loans less popular is that one cannot rent out the FHA insured property for the first year. Although FHA loans have their own benefits, you need to compare both options, before opting for either one.
For many years, investment specialists at NRIA have been advising property investors in making well-informed decisions. National Realty Investment Advisors, LCC are experts at securing high return investment properties that earn long-term income for property owners. Visit nria.net to get more insight on its unique approach to property ownership at just $11,900 cash-in plus financing.