Real estate is a savvy investment because it’s a sure thing; it’s a money-maker, a guaranteed hit. In fact, it’s none of these things because investments in this mould don’t exist.

Rule number one about property club – don’t tell people property club is bulletproof. People who think this way tend to lose money on real estate, and it’s easy to see why. They let the chips fall where they may and aren’t proactive.

In the end, it results in massive losses. Sorry to be a Debbie Downer, but this is one way to get into real estate trouble.

Here are four more for your information. Use these to build riches instead of the other way around.

Not Understanding The Investment

How can anyone not understand their investment? It’s their money and their choice. True, yet the reasons for bidding on a property are weird and wonderful.

Some people understand the true value of the area and see the retail value as an outlier. Others hear from a friend of a friend that it’s a decent punt and take the risk.

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Out of the two of them, the latter end up haemorrhaging money. To stay clear of this, do the research or hire a team to fill in the gaps.

Missing Payments

Unless there is a lot of money under your bed, the odds are high that you’ll need financial help. And, the only people with that sort of cash are bankers.

Yes, the men and women that caused the Housing Crash in 2008. You’ll not be surprised to hear they haven’t changed their ways much.

So, it’s not uncommon for them to begin foreclosure proceedings if and when you miss a payment. Follow the link for more. It is possible to negotiate but there isn’t much leverage.

The best option is to make the minimum amount every month to keep the Grim Reaper off of your back.

Misunderstanding Tax

Ah, tax, the bane of everyone’s life. Real estate investors get it in the neck the worst because the code changes like crazy.

When it doesn’t, it’s very difficult to understand. A common occurrence is a sale which ends up with a huge tax bill. The seller didn’t know this of course which is why they don’t have the money to pay.

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Oops. Sadly, the taxman wants his cut and won’t stop until he gets his pound of flesh. This almost voids the investment in the first place from a financial viewpoint. If there isn’t an accountant by your side, then it’s a grave error.

Cutting Corners

A buyer is ready to flash the cash so you need to cross the T’s and dot the I’s. All of the admin work can be tedious and expensive though, which is why you’re looking for shortcuts.

Take the inspection as an example. Why blast a couple of hundred of bucks when this guy will do it for less?

There are two good reasons: firstly, he’s dodgy, and secondly, he won’t do a good job. Should a problem go unnoticed, then you’ll have to reach into your pocket to pay.

How do you plan to avoid these real estate troubles?

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