The real estate business is lucrative, but it is often hard to navigate. One wrong decision and you may end up losing thousands of dollars. Newbies are at high risk of picking the wrong property options, but even seasoned investors can go wrong. It makes sense to pick your investments judiciously, weighing the pros and cons before sealing the deal. Some deals look great on paper, but they can be the worst real estate traps investors must avoid. Knowing them better can save you from adding them to your portfolio. Here are some real estate investments you should skip.
House-flipping appears to be an excellent investment to most real estate newbies. But fixer-uppers are often a pain in the neck. The worst thing about them is that you seldom have an idea of what you’re walking into. You may have a clear budget and viable plan to start with, but unforeseen problems can ruin both. These projects often cost more than you initially think. Apart from the cost, the time to fix the project is another concern. You may start with an estimated timeline for repairs for the property. But things can go haywire if problems crop up one after the other. The best approach is to avoid such deals unless you have good experience with the fixer-upper game.
These shared vacation properties let the owners split their time at a holiday resort so that they can stay free of cost every year. If you believe the sales pitches, there couldn’t be a better real estate investment. Not surprisingly, thousands of investors fall for big brands like Avalon Vacation Club every year. But the truth goes beyond the slick sales talks of representatives. You end up paying a hefty sum for maintenance year after year, even if you don’t use the property. It is an ongoing expense and an unwanted inheritance for your children because they inherit the ownership cost. Fortunately, it is possible to get rid of Avalon Vacation Club Timeshare even if you fall for the trap. You can collaborate with a reliable timeshare exit company and get out of the contract quickly. But check their reviews to verify their credibility first.
Income properties are another real estate investment you should skip, no matter how incredible you think they are. Renting the extra space in your home for extra cash is apparently a good idea, but there are some dire implications. Using your house as an income property could be an invasion of your privacy. Most times, it is hard to keep the spaces separate. The renter may damage your property, despite the clauses on the contract. At times, it is hard to find a tenant for such properties because people prefer separate spaces. You may end up putting together a property that remains vacant and offers zero income.
These real estate investments deserve good thinking before you go ahead with them. They can do more harm than good to your portfolio, so skipping them makes sense today and in the future. If you already own them, getting rid of them should be a priority.