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Top 10 Real Estate Investing Mistakes Beginners Should Avoid

by xyonent
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If you’re a first-time investor, eager to purchase your first property that will (hopefully) become your wealth-building real estate portfolio, knowing where to start can be a daunting task.

There’s plenty of advice out there on how to go about it, but the what to do is probably more important than the how to do it. do not have “what to do”

These are the big mistakes you should absolutely avoid when first getting into real estate investing. This includes, but is not limited to:

1. Buy with your heart, not your head

Buying an investment property is different from buying a home to live in for the rest of your life.

You don’t have to love the property, you just have to make sure the numbers and figures line up, so put your likes and dislikes aside and focus on what drives capital growth and make sure you buy investment grade properties in locations where you expect long term capital growth.

2. You don’t know your target market

Make sure you buy a property that is in a good location.

Are you looking for a family home with no off-street parking and poor yard security?


How about an executive style apartment just a few miles from the train station?

Think from the perspective of your future tenants and for capital growth, think from the perspective of your future potential owners.

Do you find these properties attractive?

3. Skimping on financial details

You invest in real estate to secure your financial future and build wealth, so it’s essential to look closely at the financial details.

Do you have money saved up for an emergency – a financial cushion?

Are the loan terms attractive? Are the interest rates competitive? What are the additional costs?

Is the loan flexible enough to allow you to re-borrow or take out additional loans if you want to renovate the property?

4. Not researching the location

Of course, the property itself needs to be attractive to owners and tenants, but buying in the right location is the most important factor.

Remember…location plays a huge role, 80%, in the capital value growth of an investment property.


Rental yields alone can only go so far, and to build true wealth you need to pursue capital growth. And not all places are created equal.

While it may be tempting to gain a foothold in the market in cheaper suburbs, price growth there is likely to take much longer (and be more uncertain) than in the mid-ring or city center.

Before you buy, check out the data for your chosen suburb to see how the property is likely to increase in value over the next 10 years.

5. Misjudging the rental market

If you are considering buying an investment property and can’t quote vacancy rates or average rents as is, you need to rethink your plans.

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