By Neda Dabestani-Ryba Prudential Carruthers REALTORS

Avoid 12 Common Mistakes Made by Novice Investors and Ensure High Rates of Return!

Real estate investment has provided many investors with positive cash flow, tax benefits and satisfaction of making an impact in others lives. Like any investment however, real estate has intricate nuances and market trends that when ignored can cause an investor tremendous heart ache.

Unbelievably many first time investors are willing to part with their hard earned cash without taking time to study their investment. They rely on traditional trends and gut feelings. Before you risk your investment take time to learn all you can about your market. By aligning yourself with right professional you can avoid these 12 common mistakes and you’ll ensure an excellent return on your investment.

1. Failure to Determine Your Time Need - Cash flow, capital appreciation, tax benefits, loss of management, equity paydown and pride of ownership are just some of things that need to be addressed before you make that investment. A service minded real estate professional can be a tremendous asset by taking time to evaluate your needs and making sure you’ve got all your bases covered.

2. Not Checking out Seller or Sellers Agents Numbers - Claims of extremely high rates of return run rampant in real estate investment. Don’t get caught up in excitement - check everything: rents, payment history, taxes, expenses, deposits, future modifications... everything. Make sure you have right agent...it’s like having a good insurance policy against overlooking all seemingly insignificant but very important details.

3. Forgetting You Are Buying a Business - Owning investment property carries with it a great potential for creating wealth and... some potentially difficult decisions. Evictions, re-investment into property and time management all need careful consideration. Remember this is not a ‘hands off’ business.

4. Avoid Negative Cash Flow - Property that eats cash every month can drain your working capital. This can create stress, frustration and become quite painful. Predicting constant appreciation is extremely difficult if not impossible for unseasoned investor. A strain on your cash flow may cause you to sell investment before benefits of ownership are ever realized.

Mortgage loan brokers will usually insist that if they can’t help you, no one can. That is simply not true. All mortgage loan brokers or loan officers have access to many different types of programs. A refinance loan program that is impossible for one broker to do, may be completely possible for another broker.

When refinancing, one of most important factors to pay close attention to is interest rate. There are many ways to make sure that you get lowest interest rate possible.

1. Do your own research online. Find out what current interest rates are.