How Not to Lose Money in Real Estate (Part 3)
There are many ways how real estate investors lose money. In the process of building a high-worth portfolio, it’s essential that you’re aware of these “ways”.
In the previous part of this 3-post series, we talked about how hiring one of the top domestic or international real estate investment companies should be a no-brainer for the investors to find the necessary help and assistance. In addition, they must also heed to not underestimate the overall cost. If you didn’t read that part, please read it here How Not To Lose Money in Real Estate (Part 2)
4. Focusing Entirely on Residential Properties
This is something many beginners do.
They completely focus on the residential segment.
It’s not bad, of course. However, diversifying the portfolio across segments is a key part of the strategy.
So, finding opportunities in the commercial segment should be a part of your priority as well.
Discover commercial projects that can be a good addition to your portfolio.
In addition, also look beyond the domestic market, at the international market. Comparatively, it’s now much simpler to invest in properties abroad.
Admittedly, investing in commercial projects or properties abroad won’t be cheap. It requires a hefty investment, which many investors can’t spare.
In such a case, you can pool funds with other investors to invest in high-end, premium projects. Raising money for real estate investment is very common now.
Connect with one of the good overseas property investment companies that can help you pool funds.
In short, keep your eyes to discover opportunities across the board and not just on one segment or market.
5. Don’t Follow the Crowd
This is as basic as it gets. And it’s very important.
It’s common for new real estate investors to feel overwhelmed and lost in the game – and then they follow others
It’s a bad strategy.
The crowd runs after what shines. Sadly, what shines isn’t always gold. Jumping in an overleveraged market because others are running that way will lead you to losses.
Besides, different people have different investment needs and goals. What’s good for them might not be good for you.
So, you’re better off having your own strategies and plans than copy others.
Do listen to what others are saying. Do see what they are doing. But before moving any piece on your board, consider your needs and goals above all. Use your own understanding, expertise, data, analysis, and other elements when making a real estate investment decision.
These are the five tips on how not to lose money in real estate.
If you didn’t read the previous parts of this 3-post series, read them here:
Of course, there are many more things that can hinder you on the path, navigating you to losses. Real estate investment, after all, is not easy. A lot can go wrong in the short-run.
If you want to build a high-value portfolio, it would take time and hard work.
So, keep on learning, put in the efforts, deploy smart strategies, and have the patience.