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How a Novice Can Succeed at Property Investment by Avoiding
the Common Pitfalls
Knowing What to Lookout for When Investing in Real Estate for the First
By the Mortgage Guy / MortgageLoanRequest.com
Everyone aspires to be a free-wheeling
and savvy investor making huge profits these days, but many never succeed
at realizing that dream by not being well enough prepared. Either they
have never invested in anything before or they have tried their hand in
the stock market, and now think that because everyone and their brother
is seemingly profiting during this latest real estate boom, they will
too. The fact is it takes hard work, knowledge, determination and staying
power. Many assume that the recent escalation in property values, and
historically low interest
rates, that have produced quick profits for others will be an easy
thing to replicate, this is the wrong approach.
This flipping of real estate, for quick gain and profit, seems to have
become the national sport. Experienced and knowledgeable investors will
often come out on top, but for a first time investor or novice it is not
so easy. Being able to take a few hits, and ride out any unexpected dips
in the market place need to be options that any investor can go with.
If an investor is under-funded and has a short-term attitude, coupled
with a lust for short-term appreciation, they are in for a rough ride
down a bumpy hill. Yes, short-term gains have been quite staggering in
the last two years, but the risks involved are just as staggering.
Finding good priced properties and lenders offering agreeable rates
is only a part of the property investment game. Having a solid reserve
of cash and unlimited amounts of time, should the markets not fluctuate
in an investors favor, are paramount to success. Having a strong knowledge
base about the local market, lending practices, contract negotiations
and interest rates will also help to offset the risks involved. If an
investor applies a good solid strategy to a bargain investment property,
and is willing and able to stay the course they should come out ahead.
Property values do rise and fall, but being able to ride this curve into
the future, and having an exit strategy for when the values are peaking
again, can insure success and good profits. The stock market is not quite
so kind. Having knowledge and skill cannot always protect an investor
if the company they have chosen goes under; but if they have invested
in a good piece of real estate, and they can manage to ride the tides
to a crest, it will be there for them to cash-out on when the time arrives.
When an investor takes out a mortgage on an income producing property
they also need some additional cash reserves, knowledge and skills. Being
able to sustain the investment property when good tenants are not available,
cash flow is negative and the maintenance and up keep is still required,
is not an easy thing to achieve. Knowing that they can wait, hand pick
their tenants, make all the necessary repairs and know how to navigate
the legalities of being a landlord are keys to investment survival.
When an investor is first starting out they should keep their head out
of the clouds and back down on earth relative to expected profits and
gain. By not setting their sights to high, and slowly building their investments
like any other business, a novice property investor will further increase
their chances of succeeding.
Profits can surely be made by the novice or first time investor but
a realistic approach is the most important ingredient they must have.
Continually educating themselves, following all the market data and
methodically and persistently looking for solid bargains is something
else they will need to do. Knowing that property investment is not like
day trading, and will take some time, will also contribute to success.
Anyone who is looking to invest is invited to use the invaluable resource
forms at www.MortgageLoanRequest.com.