Sometimes beginning and even experienced investors short circuit success by approaching an investment with the wrong attitude and destructive tendencies. To make successful investments, it's important to educate yourself on the topic, follow proper investment strategies, and find a successful balance between what's good and what's not.
While it's only natural to want to maximize profit and return from investments, especially lucrative investments like income property, greediness can be more damaging than beneficial. This is even more true when following Jason Hartman's recommendation to rent properties out to tenants to create passive income. The fact of the matter is, tenants are still people, and trying to squeeze every single dollar from a rental property could lead to a vacancy.
Buying or Selling Out of Fear
Buying a property out of fear is dangerous enough, but selling a property out of fear might be even worse. Panicked selling happens more often than panicked buying, reacting to every setback in your income property experience with the instinct to sell could result in significantly less opportunity, lower return, and more hardship.
Not Using Leverage and Reserves
who don't respect the powerful investment tool of leverage will become over-extended, and this isn't a good thing. Jason Hartman recommends maintai
ning adequate reserves to protect yourself from getting derailed by debt. The minimum amount of money that should be stay in reserves is 4 percent. This should be kept separate from savings and funds for other expenses. So, be a prudent investor and plan for possible hazards.
Investing During Major Life Changes
To make successful and smart income property investments, it's essential to have a strong, secure foundation. Trying to make an investment during times of change, such as a major career change, a relationship change, or a move, can result in problems. Although change is an unavoidable part of life, which isn't necessarily a bad thing, it's important to make sure you're on steady emotional footing before plunging into an investment.
Focusing on the Negative
Though Jason Hartman recommends being an opportunist instead of an optimist, having a positive frame of mind is helpful in any venture. Many investors who hold a negative frame of mind, ignore successes and only focus on failures tend to develop a sort of “tunnel vision.” Be sure to keep perspective, even during hard times, and don't let the small setback form an entire investment strategy.
Avoid these mistakes and pursue proper income property investment strategies
to create a stable financial status for now and the future. (Top Image: Flickr | OpenSourceWay)
The Young Wealth Team