Traps in real estate investment.

Currently, real estate investment is widely popular, whether it's buying condos to rent out, buying second-hand houses to renovate and resell, or investing in land for speculation and future resale, etc. However, with the rapid growth of the real estate investment market, new investors may think that investing in real estate is easy, leading to complacency and many wrong decisions. Therefore, to build a shield against failure in real estate investment, here are some investment pitfalls that real estate investors should be aware of in order to minimize investment risk as much as possible.

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1. Prime Location Isn't Always the Best

Anyone looking to buy a condo to rent out or resell, or any plot of land for that matter, should not rely solely on advertising claims that a particular plot of land or condo location is prime real estate. There is a risk that this may or may not be true. For example, condos near train stations don't always sell well or are easy to rent out. Similarly, land that is projected to appreciate in value in the future due to upcoming development projects may not yield the expected profit if those projects don't materialize or are delayed. Therefore, deciding which location is best or which residential project is worth buying requires careful consideration. It requires in-depth research and access to comprehensive information, not relying solely on advertising and promotional materials.

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2. Buying pre-construction projects offers the best value.

While it's true that buying a condo or housing project before construction is complete results in lower costs and higher potential profits upon completion, the risks include project delays, substandard projects being shut down, and potential investment losses or lengthy problem-solving processes. This doesn't mean pre-construction buying is inherently bad, but thorough research and verification of the project's credibility are crucial.

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3. Don't assume renting is easy.

The idea that a good location and nice interior automatically guarantee tenants is impractical. Remember that your property isn't the only one available; many other options in the same area and project offer potential tenants. Therefore, don't rush into buying a property for rental purposes assuming guaranteed tenants. Careful planning is essential to identify your target rental clientele. We need to consider our chosen property and its marketing and public relations strategies to make it easier to find tenants and make our condo or house a better choice than competitors. If you haven't researched rental management at all, it's not advisable to buy a condo or house yet, as you may not be able to find tenants quickly enough, leading to a heavy mortgage burden and financial problems.

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4. Don't focus only on the mortgage payment.

Many new investors decide to buy a condo or house to rent out or resell simply because they think they can "afford the mortgage." They only consider the mortgage payment and believe they can invest and bear the burden to achieve their profit target. However, in reality, buying a condo or house to sell or rent involves more than just the mortgage payment. There are also various transaction fees, which add up to a significant sum. After purchase, if you can't rent or sell it, in addition to the mortgage, there are maintenance, upkeep, and common area fees to bear. If you don't properly assess all expenses, you may not be able to manage your finances efficiently, leading to financial problems and impacting both your investment and your life.

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To successfully invest in real estate and achieve your desired goals... Investing successfully requires thorough education, including studying the investment process, conditions, and limitations carefully. Contracts and legal aspects are also crucial, as they ensure correct buying and selling practices and prevent future problems. The biggest difficulty in real estate investment is the desire for quick success, overlooking the importance of thorough education and in-depth information. People often ignore promotional materials that spark their investment dreams, focusing only on incomplete information and insufficient knowledge, significantly increasing the risk of failure.

Therefore, to become a successful real estate investor and effectively reduce investment risk, you can start by being open to learning and avoiding rushed investment decisions without complete and comprehensive information.

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Thank you for the valuable information from REIC.