We thought the following article (“8 Mistakes to Avoid When Investing in Property) from Jason Hartman (http://jasonhartman.com) had some good points (3 to be exact) and wanted to share it.
- Excessive Greed – Excessive greed can be an expensive attitude for investors. Wanting to maximize profits is only natural, but the price of stubbornly trying to squeeze every dollar out of a rental property could be a costly vacancy.
- Panic Buying or Selling – Panic buying is deadly for investors, but panic selling is even more perilous and prevalent. While it’s never wise to blindly rush into a deal, it’s just as dangerous to react to a random setback with a knee-jerk decision to sell.
- Becoming Over-Extended with Debt – Failing to respect the powerful investment tool of leverage by becoming over-extended is an all-too common pitfall. Maintaining adequate reserves is the best way to counteract being derailed by debt. 4% is the recommended minimum, and this reserve must be separate from funds for other expenses. Failing to adequately plan for contingencies is another mistake that violates the principles of prudent investing.
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