The real estate market is not merely an open one, but also an experimental ground for many experienced as well as freshers. However, there are some real dumb mistakes that many investors make when it comes to investing. Primarily, the main reason for these errors is the fact that this particular market gives investors little or no time at all to learn how to know to make good and profitable decisions.
The irony of the situation is that invariably your dumb mistake ends up with somebody else's pockets being filled! The path is not easy and establishing yourself in this very experimental market is not easy at all; demanding timely action and the right moves. Research reveals that to earn from this industry, you need to network and diversify extensively.
Some of the real dumb real estate investment mistakes include the following:
Inspite of knowing the importance of diversification within the industry, many choose to ignore this market essential. It is often observed that investors prefer the paradigms of a particular market only, especially the one they are associated with. They end up with contained and very 'closed-in' investments. The investments that should be considered could be along the set limitations set by numerous statistical calculations within graduate finance textbooks.
Many people, who have been long time players, do disagree on the suggestion that it is viable to hold limited stocks. However, these people are usually geniuses who in time, end up underestimating their intellect. They rigidly disagree with diversification, but at the same time utilize power-packed analytical skills to calculate the desired stock picking.
Investors need to arm themselves with strong and updated accounting knowledge. This enables them to accurately read and analyze the quarterly and annual financial statements made available to the public by companies. It is dangerous to invest blindly, without considering the instability that lurks within the garb of partial information.
Another very important virtue that real estate investors should try to cultivate is patience. The market is full of ups and downs. There are bound to be the bad and good years, sometimes alternatively and sometimes even successively! However, big time players with years of experience will vouch safe for the fact that the good years certainly outlive and compensate for the bad years.
Investors in the real estate marketing should make every attempt to master the art of dollar-average investing. This implies that instead of investing in a set number of shares, you should plan investments around a pre-set and agreed upon dollar amount. One major advantage of dollar-average investing is that you are at a lower risk of getting carried away on a high-roll of optimism, which usually culminates in the purchase of stock when the market is high.
It is very natural to ignore the small differences in expense ratios. Ignored investment expenses spring from costly newsletter subscriptions and other related online and offline financial services. These ignored expenses end up amounting to thousands of dollars negated from your net worth.
It is human tendency to err in the face of avarice. Way out investments and 'immediate-returns' investment strategies are a sure-shot way to investment downfall. It is very important to keep these common and dumb errors made within the real estate investment market in mind before investing further or for the first time.
