Real estate investment in California is by no means easy. If you’re not careful, you could end up with a financial boondoggle that costs you much more than you invested. As with every kind of investment, the key to succeeding is knowledge and the proper amount of caution.
Common real estate mistakes to avoid
While there’s certainly many ways to lose when investing in real estate, beginners are prone to making certain kinds of errors. Knowing how to avoid these mistakes can ensure you do make a hefty profit from your investments. Such mistakes include:
- Paying too much
- Not diversifying your investments
- Ignoring the needs of residents
- Not planning out an investment strategy
- Not using experts
- Choosing the wrong financing option
- Not planning for likely expenses
- Creating real estate litigation risks
Real estate lawsuits
The list above covers many issues including perhaps the most hazardous, costly real estate lawsuits. You may sue or be sued after making a real estate investment for many reasons. This can include issues such as:
- Breach of contract
- Breach of fiduciary duty
- Real estate fraud
- Boundary disputes
- Real estate agent negligence
- Undisclosed easements
- Title defects
- Tenant conflicts
- Specific performance
Specific performance refers to a situation in which one of the parties to a real estate contract fails to perform a specific duty outlined by the contract. Since real estate contracts and ownership involve many legal issues, errors made by the investor can result in some costly and drawn-out court cases.
Like most problems with real estate, proper research can help prevent many of the problems you could encounter. For example, investigating a real estate agent’s background can prevent you from being defrauded like their former clients. Always educate yourself thoroughly before signing a real estate contract.