7 Rookie Mistakes To Avoid When You Start Investing In Property

New Orleans offers promising real estate for budding property investors. This market is in the Goldilocks zone. It’s neither too hot nor too cold, but just the right temperature to buy a house at an affordable price and begin raking in revenue sooner rather than later.

Still, no real estate investment is a slam dunk. A bad bet can wipe out your resources quickly if you don’t know what you’re doing. Avoid these seven common rookie mistakes.

Those aspiring to take this route almost always use the internet to learn everything about real estate investing. Why not? It’s mostly free education — the only tuition is your time and attention. You only need to pay something to access information unavailable for public consumption.

Many YouTube influencers, TikTok content creators, LinkedIn thought leaders and real estate bloggers offer pearls of wisdom. However, most are fake gurus making outrageous claims, such as rendering investing risk-free and making a quick buck with no experience, to scam aspiring investors. You can’t test a piece of advice’s efficacy until you apply it. You can read comments, reviews, testimonials and forums to determine which domain experts are worth their salt, but even these are manipulable.

Find a legitimate mentor instead, especially a local licensed real estate agent or broker who has been around the block offering advisory services. Consulting such a professional can teach you the good, the bad and the ugly so you can see real estate for what it is and not through rose-colored glasses.

Property investing isn’t just about renting an apartment or flipping fixer-uppers for profit. Other viable options include subletting your house and buying shares of a real estate investment trust.

Deciding the kind of real estate investor you want to be is the key to success. Some investing avenues are less risky and don’t require as much bandwidth as others. Consider all possibilities to find the one that aligns with your goals.

Dabbling in various investments may serve you well over the long term. However, focusing on a single kind as you learn the ropes is wise.

Each path to real estate investing has a learning curve. You can improve only when you keep doing things repeatedly. Experience teaches you which strategies work and don’t and helps familiarize you with relevant regulations. Master an investment type before setting your sights on something else.

Real estate is just as about the location as the asset itself. Look at the big picture and avoid scrutinizing prospecting investments with tunnel vision.

If you’re not a New Orleanian, do your homework to know the town more deeply and understand what makes its residents tick. Go beyond property price movements. Learn about the city’s history, culture, natural hazards — such as hot weather, hurricanes and flooding — demographic trends, neighborhoods, landmarks, amenities and developments.

Understanding the Big Easy’s past, present and future can inform your decisions and help you identify potentially profitable real estate ventures.

Greenhorn investors may concentrate too much on personal goals and overlook what renters and buyers require. Absentee landlords are prone to this mindset.

For example, disregarding indoor air quality when renovating a rental because you’ll be living elsewhere is not advised. While contaminants may not harm your health, they can hurt your pocket since detectable pollutants render your property less livable. Also, New Orleans is infamous for its humidity, and when humidity levels exceed 60% dust mites may become an issue. Easy fixes to enhancing indoor air quality include installing pleated air filters, using eco-friendly paints to minimize volatile organic compound levels and getting a dehumidifier. These fixes make your property lucrative for tenants, help you seal a long-term lease and avoid earning a reputation for having an unhealthy rental.

Don’t overdo it, though. For instance, going overboard with decorations and selectively appealing features can backfire on you.

Trying to do it all to cut costs and pocket more revenue is a rookie move. Experienced investors outsource tasks — such as title searches and home inspections — to qualified professionals to do them correctly and efficiently.

Find a healthy balance between getting your hands dirty and seeking assistance. It will help you navigate real estate transactions accordingly and avoid unpleasant surprises, like unknown liens on a property or undisclosed damage.

Real estate investing is typically a capital-intensive endeavor. Most investors use debt strategically to increase their holdings and generate more revenue. While securing financing is advantageous, avoid exercising this luxury when the conditions are unfavorable — like a high-interest environment.

If your bank account is green enough, making an all-cash offer can help you acquire assets for less without worrying about servicing a loan. It makes sense when you have adequate dry powder you can use in case new opportunities arise. You can keep doing this until rates drop and the cost of borrowing becomes cheap enough to merit taking out debt.

Start Your Real Estate Investing on the Right Note

All newbies make blunders — even long-time investors do. While you can’t succeed without failing, make as few mistakes as possible to preserve your resources and get back on your feet more quickly.

*Written by Rose Morrison of renovated.com