Real Estate Investing Do’s and Don’ts

There are a lot of people who make a lot, or at least a respectable, amount of money in real estate. It’s an area that has, in America in particular, always provided great opportunity to many investors. But as the last several years in particular have shown, it is easy to lose a lot of money, perhaps all of it, in the real estate market.

Mess up badly enough and you might find yourself out of a home and even a career. While there is not much that most of us can do to prevent another housing collapse, there are practices we can employ to give ourselves the best possible chance of succeeding as investors in the real estate market. Here, then, are some do’s and don’ts to get you moving down the right track in your real estate career.

Do: Have Your Finances in Order

There are a lot of people out there who went broke trying to double money that they couldn’t really afford to spend in the first place. If you see a property that looks like a good buy, but you have to take out a mortgage and max out your credit cards to acquire and repair it, you shouldn’t be contemplating that purchase.

If you do risk it all and the market turns south on you even just a little bit and it takes you forever to sell, well you’ll lose a lot of money and ruin your credit in the process. Take stock of what you can really afford to invest now. Start small, if you need to. Get some successful transactions under your belt and build up your capital. Impatience is not the hallmark of a savvy investor.

Don’t: Leap into a Buy Without Investigating

Sometimes you’ll see a property on the market, and you’ll want to pull the trigger immediately because the deal is awesome. It looks too good to be true! Problem is, what looks too good to be true usually is, and you always want to ask why a property might be priced substantially beneath what you would usually expect it to sell for.

That is particularly true if the home has been on the market for a little while. If you can call upon the services of a property assessor, make sure that the structure of the home is stable…you might discover that the foundation of this beautiful home has been giving way for years and that it will cost a fortune to repair. Whatever it is, you want to make sure you know everything there is to know about the true condition of the property you are buying before you decide to invest.

Do: Educate Yourself on the Area

You may think that because you’re not moving into the home yourself that having a personal knowledge of the area is not really that important. But knowing that a home has good neighbors, a school in close proximity, cool shops, a park, and other positive attractions in the vicinity is a major plus when it comes time to sell.

In fact, being able to sell a buyer on the area is sometimes as important as selling them on the home itself! Get to know the neighbors a little bit then head down to the local restaurants on your way from checking in on the property; have some stories to tell potential buyers when the time comes to sell.

Buyers don’t just want to know that they think a property is attractive but that they will be happy living there. Showing them how much you enjoy the area can be a part of what convinces them that they will be.

Don’t: Buy a Home Site Unseen

Of course, if it’s a bad idea not to explore the area of a home your buying, it is a terrible idea to never visit the home itself. Some people try not to be hands on with properties they are investing in, but by not visiting a property you do not give yourself the opportunity to see things that do not come through on the pictures that may indicate it is not a good buy.

You might find wasp hives all around the property. You might realize that it is a million degrees at the home during the spring. The air quality might be miserable owing to a manufacturing plant in the area. The point is that you want to be educated about your property and you don’t want to wait to become educated about it until the point at which you try sell and realize that nobody wants to buy.

Elizabeth Goldman is the editor of She has written for, and many others.