Although real estate investments are a hot ticket item these days, since it’s a buyer’s market, this kind of investment isn’t for everyone! If you’re not sure, here are some personality traits, or thought patterns, that don’t work well with investing in real estate.
You’re In It For a Quick Buck
Property is one of the most expensive things people can buy in their lifetimes. Because of that, real estate gets seen as a lucrative investment to make. Houses are only getting more expensive, and the property is only gaining more value. The problem with this line of thought is if you buy a $200,000 home, and it takes six months- to a year- to sell for $250,000, you’re not making that much of a profit. Closing costs when you bought would be around $14,000; property taxes are another four to six thousand, and if you used a realtor, that could be up to $15,000 more.
Pile on the costs of keeping the lights on, and maintaining the property, and you’ll find yourself in a hole financially.
You Don’t Plan Ahead
If you have trouble making or sticking to plans, then real estate investments are something you should avoid at all costs. Failing to stick to a plan when it comes to buying properties could leave you in hundreds of thousands of dollars of debt. You could lose the property, and still owe the interest and completely ruin your credit score.
If you want to work on this problem, you can make smaller investments- or try stocks instead. Don’t go into this immediately; take some time to warm up to this responsibility.
You Can’t Negotiate
Negotiation is a large part of real estate. Getting your loan and negotiating the interest rate, buying the house, and negotiating the cost, even consulting with a realtor on their percentage. It’s back to back bargaining and getting deals, and if you have trouble laying down expectations for what you want- and can afford- real estate investments are not for you.
You Don’t Double Check Anything
Although you don’t have to do all the math by hand anymore, you can use a mortgage estimator or talk to a professional; you still need to be able to follow through. If you have trouble keeping track of projects at work or don’t look at the paperwork before you sign, then this isn’t for you. A lot of people go into this line of investing to make money off anyone who will overpay. Don’t become a mark to construction and repair companies. If you feel like you’re susceptible to this, consider working with someone at your side who you can trust to help follow through.
If you relate too much to any of these, then real estate investment may not be for you! If you still decide to work through it, then more power to you- keep in mind how these can fault you, and what you can do to work through them.