5 Mistakes Made By Newbie Real Estate Investors

Investing in Dubai real estate can be a profitable and worthwhile venture, and it surely is one of the safest and most tangible ways to create lasting wealth. That is why, it keeps attracting more and more people each year from every corner of the world. Buying a property in Dubai can definitely rake in good returns for you but being a newbie to this sector, you must not expect it to be as straightforward and easy as you think.

Being a newbie, you will have to brace?an uphill battle against a slow (and relatively unpredictable) Dubai real estate market, where profits are not as fast as promised. Therefore, not just finding the answer to?why you must invest in Dubai real estate?is crucial but how to invest and where to invest are also of equal importance. Remember, real estate investment is a long road and can be tricky too, where newbie investors may feel lost and end up making mistakes.

Let’s have a look at the following post where we have reviewed some common mistakes that any newbie investor can make in a rush to leap high.

Thinking that outcome will be quick and positive

One of the major mistakes any newbie real estate investor make is thinking to get results quickly and exactly according to wish. In an ideal world, everything happens quickly and turns out to be positive and as you plan and that too, without making any exceptional effort. Remember, you cannot create sufficient wealth from one property transaction. And this is something that almost every successful real estate investor hides and does not let others know that to become successful, it is necessary to have an innate tendency to work hard.

Rushing into a real estate deal without conducting thorough research is often a bad omen. Keep a keen eye on the market trends and never shy away from working hard. For instance, investing in?holiday homes vs. long term rental properties is a dilemma for investors?but you can choose one after knowing about current Dubai real estate market trends.

Thinking that every advice is correct

It is commonly observed that most newbie investors follow the herd, listen to self-proclaimed experts, brokers and financial advisors and invest in properties for sale in Dubai with the hope that prices will appreciate everywhere. However, little do they know that they selling them a low market value property or asset. Believing in these experts can lead you to buy a property that you may not have originally planned to.

Before starting this investment journey, you must know?how to choose the right real estate agency in Dubai?to work with. Always work with a RERA-approved real estate agent or choose an expert who provides advice against a certain fee. It is because these experts will keep your best interest in mind while suggesting you where to invest in Dubai.

Failing to plan = Planning to fail

Making an investment plan is one of the most crucial steps to be a successful real estate investor in Dubai. On the contrary, buying a property without knowing how and how much it can generate income can be futile. The?escalating prices of apartments and villas are driving Dubai real estate growth?and making it hard to resist buying properties in Dubai. However, you should still take a step back, calculate your budget, conduct a risk analysis and plan accordingly including finding an exit strategy in case the market takes a downturn and your assumptions go wrong.

Before you start meeting real estate agents or applying for a mortgage loan, you must create an investment strategy. You must not just focus on what to buy but also get hold of proven?ways to maximize returns on property investment. Carve out a detailed investment plan and then start looking for properties that fit that plan.

Omitting the negotiation

One of the worst mistakes that you newbie investors usually make is to omit the negotiation. When it is the first real estate investment, people are usually too excited to ruin a deal, therefore, they mostly skip the negotiation stage. Negotiation takes place at different levels and?smart buyers use different negotiation tricks to get better property deals. Remember, neither this is the last property in the market that fits into your budget nor you must overpay to buy it.

If you overpay for a property in Dubai, it will impact the profitability of your project both in terms of rent and capital value appreciation. The purchase price is an important factor in a successful real estate deal and if you fail to grab a property at a good price, it is likely that you would not get a good deal on the resale.

Not working with experts

When it comes to real estate investment, most newbie investors tend to think that they can handle everything on their own. There are several reasons behind it such as people find it hard to delegate their work to others, to trust others at the beginning of the investment journey and also they do not want to share profit with others. In this way, they end up making costly real estate investment mistakes such as they might end up buying the wrong property, to begin with.

To prevent all these mistakes from happening, it is best to start the journey after consulting trustworthy property estate agents in Dubai. You should also take the services of professional surveyors and financial consultants to make a well-informed property investment decision and avoid any mistake.

Not having an exit strategy

It is important to have an exit strategy, when it comes to investing in Dubai real estate sector. Real estate experts suggest not undertaking a property investment journey without having a precise plan of action. In this case, the risk is to end up with properties in your profile, which may not correspond to your profile. To minimize the risk, it is imperative to have multiple exit strategies. For instance, you may be holding back your property for too long and also if you cannot flip a property, you can quickly end up upside down.

Real estate investors may embark on such types of properties that cannot generate positive results for them and they often ruin their profile and profit margin because of poor investment choices. Therefore, it is important to have a well-defined exit strategy that allows you to go in a precise direction. It will help you stay in the right direction, without venturing out in all directions.

The bottom line

The reality is that if investing in Dubai real estate is easy, everyone with money would do it. However, newbie investors end up committing mistakes that can ruin their property profile but it can be avoided with due diligence, planning and with the help of experts’ advice. You can also commit these mistakes by not analysing and exploring the market properly, therefore, when investing in Dubai real estate, do not make a quick decision by overlooking several factors.