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11 Expensive Mistakes Real Estate Investors Make – And How To Avoid Them!

Mistakes Real Estate Investors Make

There are certain expensive mistakes real estate investors make that could be easily avoided with professional guidance.

With massive funds involved in the real estate industry, an investor wants to minimize risks and make some good returns on investment within a reasonable timeframe.

Here are some of the common expensive mistakes real estate investors make:

1. No clear goals or strategic plans. 

Stop making it up as you go!

Real Estate investment is a real business and should be treated as such.

Not every property is for you; it takes planning to know what to buy and what not to buy.

Never buy a property without planning for it or without knowing what exactly you plan to do with it.  

There have to be clearly stated key metrics with which you judge any property before making a buy decision.

Real Estate is not Russian roulette, set clear goals; develop the strategies; come up with key performance indices (KPIs), and see your business receive life and direction.

If you need clarity on your goals and clarity on the strategic plans you need in achieving them and avoid this mistake real estate investors make, you can contact me!

2. Buying with emotions and not logic 

One of the most important aspects of Real Estate Investment is emotional mastery.

Like every other fast-evolving multibillion-dollar venture, the bigger players are not those who know how to play the game of numbers, it is those who have mastered the game of nerves.

Never jump into buying or selling because of emotions, you must be able to make decisions based on sound logical, and technical analysis of the market. 

You are not a Real Estate Investor simply because you are buying what everyone else is buying, and selling what everyone else is selling…

You will need to grow your knowledge, skills, instincts, and strategy that will guarantee that you make the right decisions.

3. Skimping on research

When investing in real estate, your real work is to do some good research.

It is easy to put down the money (as long as you can accommodate it in your budget) for a property…

The hard part, however, is to make sure most of the vital boxes check out in favour of the safety of the capital as well as a good Return Of Investments (ROI) within a reasonable time.

There are too many half-baked real estate agents, advisors, and realtors out there who just want to sell to you so they can get their commission and move on to the next client…

They will often tell you just about anything to get you to make a down payment.

Always do YOUR OWN research.

Avoid these mistakes real estate investors make!

4. Not involving experts and consultants

The rule of thumb in any profession is never to walk (or work) alone.

This is true for the real estate industry too.

If you want to do it professionally and profitably, you need team members that can help you reduce the risks and be more efficient as a Real Estate Investor.

You need to have a team of professionals that work with you at least on a project-by-project basis.

This includes a property consultant and advisor like me, and a Real Estate lawyer at the least.

The quality of your team will go a long way to determine your success as a Real Estate Investor, and help avoid the mistakes real estate investors make!

I can be your Real Estate Consultant and advisor if investing in real estate and sleeping well at night after you do while getting good returns on your investment is of priority to you!Β 

5. Overpaying for a property

The business of real estate has to do with your ability to buy the dip and sell the peaks.

Your profit or loss depends on your ability to make the right buying and selling decisions per time.

Whenever you overpay for a piece of real estate, your very capital is at risk not to talk of the possibility of profits or any reasonable ROI within a good timeframe.

Quality research, patience, and prudence are your insurance against the bad investment of overpaying for a property.

The rule here is that β€œit is not all that glitters that is gold.”

Never rush into making buying decisions simply because the deal looks good.

Always do your due diligence in valuing the property and its market potentials before you jump on it. 

Avoid these mistakes real estate investors make.

6. Having unrealistic expectations

This is perhaps the most vital piece of information when it comes to real estate investment; real estate is not a get-rich-quick scheme!

Landed property needs enough time and infrastructural development to appreciate well in value.

Going into Real Estate Investment and making some good ROI requires patience. 

Having stated that real estate investment is not a get-rich-quick magic wand, you need to know that it requires some work.

Like every business, real estate investing requires skill, attention to details, consultation, research, and proven strategy.

It is not enough to just drop your money on a potentially profitable piece of land or house and walk away expecting returns in a couple of months.

You need to track its progress, improve its potentials, and find ways to market it aggressively and creatively at peak market periods.

7. Buying in the wrong area

Though the property business is booming in Lagos right and will continue to expand into multitrillion dollar business within the next decade…

It is not every part of Lagos that is profitable.

Based on ownership dispute issues and history of fraud, you may want to get professional help before buying.

Also, even though we know that real estate appreciates, the rate of appreciation differ from location to location.

So when investing, it is wise to look out for that location that has a good appreciation rate based on metrics and one that will bring about good returns on investment.

8. Not treating your investments as a business

Always do your best to keep your properties in peak condition, but never to the detriment of your overhead.

Real estate is not a hobby.

It is a business and the profits is what keeps you in the game.

Do the best renovations that the deal can accommodate.

9. Not saving for future repairs and maintenance 

While the round figures in real estate deals sound good, in reality, they may not be so good when you pay attention to the books.

The rule is simple – save for a rainy day.

Never get to the point where you do not have reserve funds for future repairs on your property.

Your ability to finance repairs may be your edge over the competition, and the final piece of mastery to seal the best property deals.

Prepare and plan for future repairs and maintenance.

But, make sure you do not overspend on maintenance or renovations

10. Putting your eggs in one basket

In Real Estate, even with the best properties, sometimes your money gets tied down as a result of fluctuating market forces.

Never tie huge money down with just one property.

There no point using a huge amount of money to get just one property in your portfolio especially when you are just starting out and not an experienced investor.

With more properties, you have a better chance of selling and letting faster thus guaranteeing proper cash flow instead of tying money down on just one property. 

11. Buying from the wrong people

Sadly, this is not peculiar to just Nigeria.

The Real Estate industry attracts a lot of fraudsters who will try to swindle you by presenting counterfeit property documents or someone trying to sell to you when they do not have the capacity to sell.

No matter who referred them, do your background checks to make sure that you are buying from the rightful owner or their legal representatives. 

Watch out for fraud alerts and triggers when dealing with prospective clients.

If the deal sounds too good to be true, it probably is.

Check and double-check before making buying decisions.

Always do your due diligence.

One of the service myself and my team also offer is Due Diligence service:

We help clients verify ownership, title, and documents of the property before purchase.    

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