We have been investing in Memphis for a long time and we have also been managing rental properties for other investors in Memphis for many years. We’ve seen a lot of success stories but we’ve also seen a lot of mistakes and horror stories. We have distilled all that down to what we call the three deadly sins of real estate investing. This is what you want to avoid.
Over-paying for the Property
In this day and age, you can use resources online to make sure you’re not paying more than what the property is worth or what it should sell for in liquidation to another investor. Whatever you want to do with the property, make sure you aren’t paying more for it than you should be.
Over-leveraging the Property
When we talk about over-leveraging, we mean over-borrowing, or borrowing too much. We have seen investors buy a property for a price that’s right, but then they borrow more than the property is worth. It leads to disaster. Leverage is a great tool for real estate investing, but it’s like a fire. It has to remain contained and controlled so it doesn’t burn the house down. Don’t borrow more than the house can support.
Mismanaging the Property
Whether you decide to manage the home yourself or you want to use a professional property manager, make sure it’s managed well. Property management is not a hobby, it’s a business. Make sure your property management partner can be sure that business is being taken care of. Someone needs to mind the store and watch the shop.
Avoid these mistakes at all costs. If you have any questions or you need help avoiding these mistakes, we are happy to help. Contact us at CrestCore Realty.