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3 of the Worst Real Estate Traps to Avoid

By Anita Townes | February 5, 2020

Real estate is a very complex business. If you know what you’re doing, you can make massive profits. However, you can also lose huge amounts of money if things go wrong. Read this article on three real estate traps to avoid so you’re more informed the next time you invest. The last thing you want is to lose your life’s savings over a poor decision.


Timeshares are a real estate trap to avoid at all costs. A timeshare is essentially a shared vacation property. Timeshare owners can split their time at the property and share ownership of the place, as well. In theory, timeshares seem ingenious. However, this couldn’t be further from the truth. First, the interest rates in timeshare contracts are extremely high. People don’t realize that timeshares are a continuing expense. You can never just pay a one-time fee and be done. Between the ridiculous interest rates and high maintenance fees, timeshares are incredibly costly. Also, some timeshares operate on a fixed schedule. This means you can’t decide when you want to vacation. Between the costly fees and rigid schedule, you should avoid investing in timeshares at all costs.

Income Properties

On paper, income properties seem like the ideal real estate investment. If you have extra space in your house that you aren’t using, why not rent it out to someone to make extra cash? The reality is, there are so many horror stories involving income properties. If you turn your home into an income property, you’re inviting someone into your life. It can become challenging to keep your spaces separate. Also, even with contracts in place, there’s no way to know the other person won’t damage your property. Perhaps they’ll even flake out on their portion of the rent. This is assuming you can even find a renter to begin with. Imagine putting together an income property only to have it sit on the market for days on end.


So many people want to get into the house-flipping game. There are multiple television shows dedicated to the idea, too. However, the sad truth is, fixer-uppers aren’t a wise real estate investment. For one thing, you never know what you’re walking into. You can budget and think you have everything mapped out, but there are always unforeseen problems. The projects always end up costing more than you think they will. So please, think twice before you bite off more than you can chew. The last thing you want is to be underwater financially because of a lousy house flip. Make a smart decision and leave the fixer-uppers to the experts.

This list of real estate traps to avoid will have you thinking twice before investing. You can find significant success in real estate if you know what you’re doing. However, people usually just get caught up in the hoopla of what’s going on around them and end losing a ton of money. Think twice before you make any investments.

Anita is a Realty Biz News Contributor and loves all things real estate from housing, marketing and investing.
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