Since only one year ago, the price of Indianapolis homes has risen by 18.6%. If you’re looking at investing in a property, now is the perfect time to jump in due to population and job growth and a strong rental market.
But if you are considering investing, you must do it correctly. So let’s take a look at six common property investment mistakes and how you can avoid them.
1. Not Properly Planning
You may be tempted to just jump into property investment. This is especially common when the market is doing well. However, you need to thoroughly plan out your property investment strategy. You’ll need to invest a good amount of money, so it’s nothing to take lightly.
When creating your plan, make sure to think about what types of property you’ll buy, how you will purchase it, and how you will manage the property and your future tenants.
Part of this also includes doing your research. You need to ask questions about the neighborhood, potential tenants, and any homes you are considering purchasing.
2. Not Finding Help
If you do adequate research, you may feel like you’ve learned everything you need to know to start investing in homes. While you may even have related experience, the process can go much smoother if you ask for help.
For example, you may want to tap your network to find a good home inspector, handyman lawyer, and insurance agent.
Even more helpful is a property manager. They can help you find tenants, take care of the lease, and maintain your home. A manager can even help deal with many of the day-to-day tasks that become annoying and overwhelming.
3. Getting the Wrong Financing
Finding the right way to finance your property investment is crucial to being successful when you are investing in homes. You should try to find a fixed-rate mortgage with a low interest rate. Additionally, you should consider applying for property investor loans or paying cash.
4. Not Budgeting Properly
Underestimating your expenses is quite common for any homeowner. Things always come up and cost more than you expect. To combat this, make a list of all of your monthly costs for maintaining the property.
Once you have your costs, you can ensure that the rent you charge is enough to cover them.
5. Forgetting About the Local Market
The local housing market is what will determine everything about your investment. You must pay close attention to the market in Indianapolis and make your plan around that.
Your property manager can make this easier since they should have a thorough knowledge of the area.
6. Having the Wrong Mentality
Some people think real estate investment will make them a ton of money quickly. However, that is not necessarily true. You should be aware that it may take time to build your financial gains. This is why a long-term strategy and patience are essential.
Avoid These Property Investment Mistakes
Property investment can seem deceptively easy. However, you need to avoid common property investment mistakes that make it harder to turn a profit.
Contact the Home River Group today to get a property manager to make the whole process easier for you.