The Phoenix metro is expected to have one of the hottest real estate markets in 2020. That’s according to a recent report from the Phoenix Business Journal. Arizona’s capital and largest city tied with Dallas for the fifth fastest-growing housing market in the United States.
Across the country, home values are expected to increase by 2.8% in 2020. But in Phoenix, more than half of real estate professionals said they predict values in the city will grow faster than the national rate.
While this information may be good news for prospective real estate investors, that doesn’t mean they should jump in headfirst without the right knowledge or strategy, as mistakes can be costly.
Mistakes new investors should look out for
These are some of the most common many first-time investors make:
- Not knowing who to trust: In the digital age, many people claim to be real estate “gurus” or “experts.” Before deciding to take one of them as a mentor, new investors may want to do their research and proceed with caution.
- Doing everything independently: Like many ventures, successful real estate investing requires a team effort. A real estate agent can help investors find cheap and suitable property. A mortgage broker can make sure the investor gets a reasonable rate and an investment coach can help push the project towards success.
- Overspending on renovations: In some cases, new investors may feel tempted to spend money on lavish renovations to attract prospective tenants or buyers. However, some may fail to realize that overspending on renovations can have a significant impact on their cash flow and property appreciation.
- Only following their gut: For many investors, it can be easy to get attached to a specific venture. However, they must remember that picking the best investment requires extensive evaluation. When figuring out if an investment will be profitable, investors need to analyze market, property and neighborhood data, rental projections and other factors that could be essential for their long-term success.
Knowledge is power when getting started
While it can be tempting to jump into the market right away, investors should try to learn as much as possible. Luckily, with the right tools, assistance and support, investors can benefit from the profitability of the Phoenix housing market.