What are some gotchas of investment real estate?

Always get an inspection before you close a deal. You really need to know what ‘hidden’ problems there could be.

Adding to @augustlan – get a thorough inspection, not the cheapest one you can get to save a buck now

There are too many to list and it depends very much on the area (not location) with regard to things like employment, schools, perceived crime rate, local by-laws, real condition of the property, tax laws, etc. etc. You really need to do careful research. I have been heavily involved with property investment for a decade or so. Where I am we can claim all losses back as a tax reduction (Negative Gearing tax laws).

Are you considering single family homes or income property such as apartments or commercial property? All share some considerations but each have many unique considerations as well (occupancy rates, turn-over of leasees, rent control laws, utility distribution, etc). Are you looking at fixer-uppers with quick turnover or longer type investments? See ya….Gary/wtf

Don’t expect fast money. Real Estate investing is normally for long term gains. If you aren’t looking to keep a purchase for at least 5 years, and you have to finance the purchase, you won’t break even.

If you have the full purchase price ahead of time, your will have more leeway, and the market is probably at rock bottom right now, so it should be a good time to invest, but there are many pitfalls. Be sure to do extensive research before you make your first purchase. My best wishes for good luck.

Definitely make sure to include maintenance costs and vacancy in your calculations, regardless of how optimistic you are.

Also, remember that it is really hard to refi an investment property now, that’s why lots of people are losing their properties, so make sure you are clear on your mortgage terms…