When it comes to growing your wealth, investing your money, especially in real estate, is one of the best and safest ways to increase your money. However, being one of the safest methods doesn’t mean that doing so is inherently risk free. There are many ways that you can be duped or scammed into losing money, but there are also risks you could bring upon yourself. With everything that goes into investing, protect yourself against loss by being aware of some of the easiest ways that you can get burned in a real estate investment deal and preparing yourself against them.
- Never, ever hand over unsecured money.
- One of the easiest ways to lose your money is to plain old hand it over to someone. Say you stumble upon a once-in-a-lifetime bargain on your dream house, and in your haste to secure the property you hand over money without any real assurance or security on your end. Suddenly, the seller has vanished, you find out the property was never even actually listed by the owners, and now you’re out thousands of dollars on top of everything. Before you ever let any money leave your hands (or your account) have some sort of security so you know you won’t get burned.
- Do your own research.
- Before you start looking to invest in a property, find an area whose real estate will be lucrative and have a good potential of yielding high returns without too expensive of an investment. You also want to make sure that you have third party appraisers and home inspectors on hand for every step of the process. Although it might be easier to have the seller handle all of these things, especially if they offer, you want to have an unbiased person who will make sure that you’re both being treated fairly and receiving the best deal.
- Be realistic about the repairs.
- When you see a property that’s a good bargain, it can be easy to see the potential profit at your fingertips and gloss right over the expected repair costs. Before you even consider purchasing a property, make sure you have an understanding of approximately how much it will cost to get the property “up and running,” so to speak. While unexpected expenses are a part of every property renovation, having an accurate estimation of what the repairs will cost helps you make sure you don’t run out of money halfway through your project.
