Real estate investors often overlook certain aspects of investing, especially when it is their first time. Lack of extensive knowledge about the dynamic housing market in Columbus and Phenix City can lead to irreversible errors and major losses, which can be difficult to recover from.
Based on our 20+ years of experience in the Columbus and Phenix City rental housing market, here are some of the most common pitfalls or mistakes of real estate investing and how you can avoid them successfully.
1. Failing To Research the Columbus Real Estate Market
Buying a property without market research can lead you to invest in a property that has little to no demand and cause your investment to operate at a loss. It is, therefore, important to thoroughly research the market. Learn about the prime locations with high real estate demand and the types of property that generate more profits. Analyzing whether the current market is a buyer’s, seller’s, or renter’s market can help you make better-informed decisions. You can talk to a professional property management company in Columbus to get detailed information about the current market scenario here.
2. Lack Of Strategy
No matter how well you research the local market, lack of strategy or a plan can derail your investment. It is essential to strategize how you plan to invest your money, in order to make the most of it. To create a comprehensive plan, you will first need to set clear investment goals. Take into account the location, type of property, estimated visible and hidden costs, and financial preparedness. For instance, if you purchase a fixer-upper, calculate the renovation costs, and analyze the time frame and costs you will incur to make the property rent-ready.
3. Inefficient Financial Planning
Inefficient planning of finances is yet another real estate investment mistake made by new investors. To avoid this, you must properly estimate the acquisition cost, the down payment, HOA fees if applicable, legal expenses, renovation costs, and your mortgage. Consider securing a loan through one of the government-aided entities to bolster your financial strength. Alternatively, you can think of paying in cash or with a fixed-rate mortgage to help weather a downturn in the market.
4. Overspending On Renovations to Your Columbus or Phenix City Property
The purpose of renovating the property is to enhance its amenities and attract quality tenants. However, some landlords over improve the property by adding more than what is necessary. Keep in mind that you need to differentiate between your home and your investment property. Budget your renovations, and spend wisely. Think what your renters actually need before installing smart appliances, or making expensive additions to the property.
5. Handling Everything On Your Own
There is more to investing in a Columbus property than simply purchasing one. After buying the property, you will have several crucial tasks on hand, such as getting it rent-ready, advertising it on the right platforms, and finding quality tenants. Landlords often make the mistake of trying to do all the work on their own and end up inviting more stress than they can handle.
A better solution is to hire professional property managers as they can handle these tasks efficiently for you. They are skilled at managing rental properties and tenants and can help you with maximum revenue generation.
A reputed company like Bickerstaff Parham Property Management, which has been in the real estate business for over 20 years, can be your partner in Columbus property management. Our licensed and experienced managers can help you choose the best property in Columbus that meets your investment needs and help you in avoiding critical mistakes.
For more details, talk to one of our expert agents today!