Real estate can be a rewarding career choice for many. However, are you cut out to be a real estate agent? Are you destined to be the millionaire who began by trying his/her luck in the real estate market? While real estate TV shows like Flip This House and Million Dollar Listing can inspire billion-dollar dreams, how many rookie real estate agents actually go onto become successful?
While real estate isn’t always as smooth sailing as TV reality shows portray, you can make your experience as a real estate agent or investor a lot smoother. You should think about investing in real estate education and training programs. These provide all participants/students with the necessary knowledge of predicting market trends, the basics of correct and timely investment, and the invest faux pas every newbie must avoid.
You can find thousands of sponsored ads all over the web for similar training programs and seminars. However, finding one can be challenging. If you are new to real estate, you might want to check out Phill Grove and his philosophies to get a head start.
At the same time, always remember these four don’ts every new investor must remember –
- Going easy on the home inspection
There is nothing that can cost you more than the basic home inspection. It is easy to overlook foundation problems, pest and mould problems, and even asbestos problems. Flipping a house is exciting, but the possibilities always depend upon the strength of the structure.
Unless you are sure about how much you need to spend on repairs, you will never be able to predict the total cost of the property. To estimate the profits, it is imperative to include the cost of repairs.
- Not screening tenants
Almost all real estate agents know about the two telltale signs of troublesome tenants – people who want to move in immediately and those who wish to pay a year’s rent in advance. These are the two major red flags that you should always look out for.
There are plenty of good tenants out there, and although the prospect of someone paying upfront for a year seems lucrative, always remember that it is a sign that your new tenant does not want you around!
- Not crunching the numbers
Unless you are ready to consider repair costs, mortgage payments, insurance, taxes, and maintenance costs, you might be looking at an unprofitable project.
You need to maintain a tally of every expense you have met. These can be small expenses like replacing the washer of a tap or a showerhead or major ones like fixing the roof or HVAC.
- Failing to procure cash reserves
Once you run the numbers, you should be able to understand how much capital you need for your investment and how much backup or emergency cash you need. If your property is recently renovated, you might want to begin setting some money aside for upcoming repairs and replacements.
Becoming a successful real estate agent takes more than chutzpah. You will need extensive knowledge and understanding of the market. Sometimes, sudden unplanned bumps can throw the investors off their track. These hurdles include mold problems, pest control issues, foundation problems, and zoning issues.
