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August 6, 2018

Updated September 16, 2020

The real estate business might seem easy to handle; however, it is full of pitfalls that you can avoid just by reading this article like any other business. Although it looks like a prosperous job, it has its ups and downs, and it heavily relies on market trends. Knowing the market dynamics and some of the ground principles when closing a real estate contract will be your essential ingredients to becoming a successful investor.

In almost any real estate market, you will find this business blooming. There will always be people looking for a place to live, so knowing the basics will soon turn you into a property expert. However, it is not all about knowing how to estimate the property’s actual value but also about being able to predict the income it will bring in relation to the amount it is going to take to buy and maintain it.

3 Common Pitfalls of Real Estate Investing

One way to start this business is to spend a lot of time and money on courses, books, and resources that promise to help you become the best real estate agent. While these books might be a supporting factor, it might backfire as well.

First of all, you might be caught up in a situation where you spend a lot of time reading all these materials and losing your momentum. You should start investing as soon as you feel confident enough. Whenever we want to do something new, there is an energy trigger at first that pushes the kick-off.

After taking the first steps into the real estate area, several situations will require you to stay focused and follow your instinct. However, the most successful real estate business people have been through all the possible pitfalls, so they share the most useful advice now:

1. Always think about ROI.

Although purchasing a new property might be exciting, you should always think about why you are buying it, namely to provide you with revenue and long-term income. Whenever thinking about a property, think about expenses related to the rent, mortgage, and other supplementary costs. Write it all down in an Excel file and crunch the numbers – this will help you see a clear picture of the investment you are going to make.

2. Don’t rely on emotions but purely on financial research.

Any real estate business you are doing needs to have purely financial grounds. This means that buying should not be centered on the idea of liking the property for its paint color or because it was full of dogs when you visited it. As harsh as it might sound, make it all about numbers and how financially profitable it is to buy it.

3. Keep your properties in the same area.

One major disadvantage when having numerous properties located in different geographical areas is that it makes it very difficult to manage them. Not only will you need to be connected and stay up to date regarding different real estate markets, but you will also need to deal with each property separately.

Most Efficient Tips Given to Real Estate Agents

Unfortunately, mistakes in this business can cost you a lot of money. This is why it is absolutely necessary to avoid the pitfalls coming your way. There are times when you need to rely on your intuition; however, there are a few golden rules that all young real estate agents can learn:

1. Don’t go for the first property you see, as there might be another close by which is cheaper, and it makes more sense for you to buy it.

2. Don’t lose momentum, as good properties sell quickly, and you might lose one if you’re not confident about your purchase.

3. Don’t try to make a lot of money from the start. Although this is not a sure way to sky-rocket revenue ventures, you can still build your real estate business and obtain a sustainable financial income.

4. Do your market research from the beginning and go for local properties as much as possible – this will help you have a good grip on the entire process and monitor your property evolution in real-time.


All in all, a real estate business can become a maze where you can get lost very easily. Avoiding the most common pitfalls will help you have a smooth start; however, it is up to you how dedicated you will become with time. As in every other business, luck can also be a great ingredient; however, being aware of the most frequent mistakes can significantly ease your job. Good luck!

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