1.    Don’t sell too soon. One of the most common mistakes made by real estate investors is that they turn over properties too soon.  It is completely natural to want to take advantage of a hot market. However, in an area where the market goes through fairly regular cycles, investors often generate more cash at the time of sale when they hold onto the property for a year or two in order to take advantage of tax benefits while waiting for the market to hit its true high point.  This is particularly advantageous when the property was purchased with non-traditional financing that requires minimal payments for the first several years of the loans.

2.    Don’t over pay for a property. When becoming an investor, you should always remember that when investing in real estate you make money when you buy – not sell – a property.  Determine in advance how much you want to make, and be cautious not to over pay for a property.  A good goal is to spend no more than five times the amount of rent you plan to collect during your first year as an owner.  Be sure to factor in a 25% vacancy rate, because it is likely that this will make up for the time that you spend renting out the units.

3.    Don’t fall prey to  scams. Although it is not extremely common, some first time investors have purchased properties with inflated value due to falsified or inadequate record-keeping.  When purchasing an investment property, you must insist on seeing the seller’s books. And, you should definitely ask the seller to verify anything that catches your attention. Otherwise, you are likely to end up paying far more than the actual value of the property at the time of purchase.

Hopefully, these 3 tips will help you avoid real estate investing mistakes which could cost you a lot of money.  Take this information and apply it in your own investment strategies you’re bound to experience a very lucrative real estate investing career. Avoid costly mistakes is one of the essential steps to achieving financial freedom.  This fact is especially true when it comes to real estate investing.  Buyer, beware!