1. Not raising rents. I was shocked when a landlord told me that his tenant in a particular house was only paying $250 a month for rent when the market rent for that area was about $750 a month. The landlord said he had never raised the rent in 20 years, and that he did not have the heart to raise the rent on anyone. No wonder his tenant had not moved out in 20 … (1 comments)
1. Rushing to buy. In 2004, I called myself a full-time real estate investor yet I had never owned any real estate. With my hard-earned money burning a hole in my pocket, I bid sight unseen on a 5-unit property in inner-city Philadelphia because the flier at an auction showed a pro forma capitalization rate of 17 percent. That was a costly mistake and a valuable learning experience. I recklessly bought the property with no due diligence because I felt the … (6 comments)
mistakes by investors: Investors: One Mistake Is All It Takes
- 06/17/10 08:16 AM
It was supposed to be a simple transaction. Invest in property, rent it, and have the tenant pay the mortgage. The young couple had allocated $52,000 of their savings to buy a detached single family house as their first investment rental property. The couple's goal was to renovate the house, rent it with the help of a property manager, and then refinance so they could recoup their initial cash investment while keeping the house. They were not into flipping property. Their real estate consultant from a property investment company told them that the After Repair Value (ARV) was around $65,000, … (3 comments)
The mistakes that experienced investors make can be different that the mistakes that novices make. Below are 12 common mistakes I see from those who own multiple units.
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