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This can mean investing in alternative assets like real estate.
But make no mistake real estate investments are not a guaranteed win.
This can lead tosmaller returns or losseslater on when you sell the property, Breeden said.
Poor Cash Flow Management
A rental income is an investment that requires financial upkeep.
When your rental income doesnt cover your expenses, you could quickly face financial trouble, Breeden said.
Underestimating Repair Costs
Part of your job as a landlord is to cover repairs.
Its essential to get a home warranty to help pay for them, but warranties wont cover everything.
If you dont plan ahead for these costs, you could find yourself spending more than youre earning.
You may need to hire a property manager, and thats not cheap.
If youre not managing the property yourself, hiring a property manager adds extra expenses, Breeden said.
These fees can reduce your profits, especially if you havent budgeted for them ahead of time.
Bad Location
This is part of the research factor, but deserves its own explanation.
This will slow down your cash flow and delay any returns on your investment, Breeden said.
Borrowingtoo much moneyto finance your property can backfire if interest rates rise or property values drop, Breeden said.
This can increase your monthly payments, making it hard to avoid foreclosure.
Ignoring Market Trends
The housing market fluctuates and you oughta be constantly looped in to the trends.
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