Real Estate Investing Mistakes You Must Avoid

Sujan Afi S

Investing in real estate seems to be very attractive and safe for several people. But it is not always easy to earn a handsome amount of profit by investing in real estate. You should avoid several mistakes while investing in real estate.

If you wish to earn a profit from the real estate sector then you need to be very careful about those mistakes.

However, if you are new in the real estate investing sector then you must be extra careful to ensure a good return from your investment. Thus, you can save yourself from various financial losses.

Now, let’s go through a few significant errors that you must avoid. 

General Mistakes in Real Estate

There are many significant mistakes you should avoid before investing in real estate, such as

Mistake 1: Lack of proper market research before investing

Doing the proper research before investing is very important for any kind of investment and it is especially true for the real estate sector because the real estate market is very dynamic. Many factors influence the real estate market like economic condition, property rates of the desired location, political environment, population growth, transport network, rental demand, nearby facilities, builder or developer history and background, water supply, etc. 

Therefore, before investing in any property you need to do proper research on the above-mentioned factors.

Mistake 2: False estimating of your financial capability

Before investing in the real estate sector, you need to estimate your financial capability in the right way. False estimating of financial capability can result in some problems while investing in real estate. There can be an unwanted delay in the process of investment, loss of the dream investment property, loss of time, mental disruption due to the failure of a real estate deal (because of lack of money), etc.

This highlights that it is very important to estimate your financial capability before investing in any property to complete a real estate deal within your budget and proper time frame.

Mistake 3: Forgetting to check the reputation of the builder

The number of fraud cases in the real estate sector is increasing day by day. This indicates that it is very important to check the reputation and background history of the builder before investment. A wrong builder causes many problems like the supply of poor construction material, fault in the architectural design of the building, financial loss, breaking of the promise regarding the terms and conditions of the deal, failure to collect proper legal permits for the constructed building, the property might not be registered under RERA, lack of transparency of the project, poor customer services, etc.

It is very important to check the reputation of the builder to make your investment a profitable one. You can check the background and reputation of the builder in several ways. You can do online research to know about the background of the builder, you can get feedback from the previous customer, etc.

Mistake 4: Failing to choose the right type of property

There are various types of real estate property, like residential, commercial, etc. It is quite difficult to choose the right property type before investment, especially for first-time investors. Depending on your financial conditions and risk-taking capability you need to choose the property type for investment. This will ensure a maximum return in the shortest period.

Mistake 5: Ignoring the expert advice

It is observed that most first-time investors in the real estate sector do not seek professional advice before buying any property. This, in many cases, leads to financial losses. They think that investment in the real estate sector is under the control of their general knowledge and they can successfully buy a house/property without the help of an expert. But unfortunately, this is not true.

Often, after a certain period, they fall into various hidden traps of the sector and face unexpected challenges which ultimately leads them to bear heavy financial loss and additional headaches. So, it is always better to consider the advice of the expert. 

Mistake 6: Rushing for the deal and ignoring paperwork

In many times, it is witnessed that the investors rush for the deal and ignore the paperwork. But it is an important part of completing a deal successfully. Paperwork contains all terms and conditions in written format; therefore, you should carefully check all the details of the paperwork.

You might also seek professional help if you find difficulty in understanding the legal documents. But don’t rush and complete the deal without checking all details of the documents because it might lead you to great losses.

Mistake 7: Ignoring the number of closing costs

Closing costs are over and above the property’s price. Several investors ignore the closing costs. Although the number of closing costs varies from deal to deal generally the number of closing costs is around 5% of the price of the property.

You should be very careful about closing costs since the beginning for the successful and easy completion of a real estate deal. 

Mistake 8: Blindly trusting the words of the builder and others

In many cases, the investors get stuck in the trap of fake commitments and promises of the builder and others due to their polite behavior and gentle look. But you should always be careful about your investment. Try to consider the deal as a business deal. You need to verify all the words of the builder and others while going to invest in a real estate property.

To Summarize

Although it appears that investing in real estate is quite easy the inherent truth is that it is not so. Fortunately, if you follow a systematic and proper planned way for investment then you will be able to avoid unwanted difficulties and losses.

I hope that I have been able to cover some important points that you should consider before investing in any property. Nevertheless, you might mail us at in case you want to know more about real estate.


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