There are millions of free blogs, magazines and even books on NJ property investment. Some were written by successful investors. Others were written by investors who may not have been successful, but understood the real estate market nonetheless. In a nutshell, there is no shortage of information out there when it comes to real estate investment. Strangely, people, especially first time property investors and their ‘wanna-be’ counterparts make costly mistakes. Some mistakes end up being costly, while others stand out as lessons. While it may be hard and even impossible to come up with a single rule that can solve investor problems and address risks, there are mistakes one can avoid. Some of them include:
Impulse Buying
Experts estimate that 90% of home buyers make decisions based on emotions. The other 10% make the decision to purchase based on logic. Letting your heart rule over you as you invest in a home is never a good idea. That’s solely because emotions have cloud judgment all the time. So, you end up over-capitalizing on your first purchase and even subsequent ones while you should be negotiating on the best price possible. Your decision to buy and even to sell should always be based on analytical research. In other words, think of yourself as an informed buyer. Then act like one. This will give you an upper hand while negotiating.
Procrastination
The real estate market is pretty much like time. It waits for no man. You must therefore be quick on noting opportunities around you so as to seize them before your competitors do. This does not happen a lot today though. Part of the reason why this happens has everything to do with the fear of taking calculated risks. First time investors also tend to read a lot on real estate trends, watch real estate shows, attend seminars and even book appointments with key players in the market. They then end up with too much information but do nothing. Experts call this ‘paralysis by analysis’.
Speculation
The NJ property market hardly ever disappoints. This does not mean though, that one can be rich overnight. That said, approach the property market with patience and persistence. Securing proven and high performing property that’s guaranteed to grow over time is far much better than taking a risk on a property you’re planning to sell in a month or two. The profit margins in the latter case might be slim or none at all, especially after deducting mandatory expenses like capital gains tax.
Not Doing Your Part
You must have heard this so many times. Do your homework. But how? Be an informed market player as already hinted. Keep in mind though that there is a huge difference between knowing what the market wants and how it behaves and understanding how the market works. Understand how the market works and everything will fall into place. Be sure to also surround yourself with peers who understand the market better than you do. Only then can you manage other vital investment factors like cash flow management.
