Yahoo has an interesting article titled 10 Biggest Mistakes of Novice Investors that deals with some of the pitfalls of real estate investing. There are a lot of "investors" out there, so there is plenty of room for mistakes. According to the article:
"The National Association of Realtors reports that nearly a fourth of all the houses sold in 2004 went to investors; about 80 percent of investment properties are existing single family houses."
But just because a lot of other people are doing it, doesn't mean you should. Buying real estate is complicated and frought with risks -- there are a lot of pitfalls. Yahoo's top 10 are:
1. Falling in love with the property.
2. Not performing your due diligence.
3. Forgetting the rule of home improvements.
4. Thinking you'll get those low mortgage rates you see on TV.
5. Not pre-screening tenants.
6. Breaking your own rules.
7. Investing long-distance.
8. Paying too much for the property.
9. Not studying the competition.
10. Being underinsured.
If you're new to real estate investing (or thinking about it), I'd recommend this article as a great primer on what to avoid.
Great article. Thanks for the link.
Posted by: geoff | July 27, 2005 at 01:16 PM