5 Challenges You Will Face in the Real Estate Business



When you think real estate; capital gains, rental income, home ownership and cash flow come to mind. That is the big picture. Is it really that easy and rosy? Maybe not. Just like you might start looking for an injury lawyer when you find yourself working in a risk environment, cushioning yourself in the real estate market will require you to look for knowledge.

Is real estate for you or should you stay away from it and invest in stocks instead? Other than the battle between the needs of millennials and baby boomers in home ownership, the pain points of investing in real estate are real. If you have the stamina to stand it, then you have the right to be rich from power of land investing.

  1. Time wastage

Securing a listing can be really hard, let alone the stress of having to look for a house only for it to be removed out from the market. Research shows that 85 percent of agents don’t make it past the first year in the business. This is because the market is controlled by so many factors that are sometimes beyond your control.

Not all startups end up in buying a house. Some give up because the process is too long and strenuous, others are hit hard by the dynamics. The result will be wasted money, wasted time and disappointment.

  1. Market fluctuations

Money is made at the purchase point. So when you invest in the market and recession hits, if you are not well versed you might end up panicking and selling at a loss. Sometimes the conditions could hit you hard making you to lose all the value of your investment.

The change in the market also affects the interest rates and policies governing lending. This could lower your chances of getting a mortgage loan. The result? A real dream killer. If you had planned for so long only to be told you cannot afford a loan, the damage is bad.

  1. Incompetent agents and lawyers

The real estate market is not safe from quacks parading as experts. You might end up hiring an agent or a lawyer who will end up messing up your deal than if you did it yourself. Sometimes, no amount of background checks can shield you from those.

When the person you have hired is not competent enough you may end up with a raw deal that you will pay for your entire life. Some are just out there to steal your money

  1. Difficult buyers and sellers

The negotiation process is not for the fainthearted. Cutting through the wants and reaching a common point can be daunting. The market is very competitive and sometimes your budget can seem so little compared to what you want. Bidding can expose you to arrogant and difficult people that are hard to convince.

  1. Long term stress

The whole process is strenuous considering you don’t want to lose a dime. The search, the comparisons, the hiring up to the last process of closing an offer is not easy. This strain can expose you to stress which can lead to depression if not checked.

Conclusion

Go into the real estate business with an open mind that is ready for anything. That way you will weather all storms and secure a good bargain. It is easier when you know what to expect. That way, you can start preparing psychologically. The good news is that, none of these problems are hard to crack .Just a bit of persistence will sail you through.  Should you invest? Yes.

Chris Porter About Chris Porter

"Chris Porteous has significant experience in the financial markets with stints at Goldman Sachs, UBS Securities and DBRS. At DBRS, Chris extensively covered the Mortgage Backed Securities market, Covered Bonds and regulatory changes involved in the real estate markets. Chris currently runs a personal Real Estate Investment Trust with over 15 properties located in South Florida."