5 Life-Ruining Mistakes for the New Home Owner to Avoid

real estate investor mistakes

Buying a house is one of the biggest investments most people will ever make, and many of us make this decision with an astounding lack of information.

When I bought my first house, I had spent about 30 minutes walking through it before taking the plunge, and putting down the largest pile of cash I had ever committed to anything.

Why did I throw so much money at something without doing more homework?

Because that’s what everybody does… and regardless of how “normal” this may seem to your real estate agent, it's crazy. You SHOULD be doing more homework before you make this decision!

After buying a few different houses and running my own real estate business for over a decade, I’ve come to realize there are a few things everybody should research before they sign on the dotted line, but very few people think of these things.

In this article, I’ll share five of these little-known pitfalls to watch for. With any luck, you’ll end up saving yourself years of frustration by identifying these things ahead of time.

1. Get an insurance quote.

Not all properties are created equal.

As obvious as this should be, most home buyers are so busy dreaming about their future that they don’t think about the things that can rear their ugly heads and become a MAJOR inconvenience after they’re locked in to this long-term commitment.

One easy way to uncover some of these inconvenient truths is to get an insurance quote on the property you're looking at. Why? Because it will tell all kinds of helpful information – including crime rates, flood risk, types of neighborhood claims and more.

True Story: My first house was in a neighborhood with a fair amount of crime, and we were also located well-within a flood zone. Both of these issues became fairly problematic while we lived there – when our basement flooded AND our house was robbed while we were on vacation. These issues also presented some problems when we tried to sell our house years later… because after all, who wants to buy a property that was recently robbed and has a history of flooding??

RELATED: Is Your Property In A Flood Zone? Find Out In 2 Minutes or Less!

If I had investigated the potential for these things prior to purchasing, I probably would've picked a different house – but alas, I wasn’t able to give myself such sage advice all those years ago.

Don’t make the same mistake I made. It's not hard to get a simple insurance quote (believe me, any insurance agent will be happy to send you one). Alternatively, if you’d rather investigate these things without making a phone call, check out some free websites like freeflood.net and crimereports.com, where you can get a lot of the same information in your area. 

2. If you’re looking at a house near a school, visit the property at both 8am – 9am and 2pm – 3pm on a weekday.

You probably remember back when you were in school, right?

It’s not uncommon for buses to start lining up 30 minutes before kids get out, while the other side of the building has another 40 cars clogging up traffic during these times of the day.

Especially if the house you’re considering is in a densely populated area with narrow city roads, this can make it very problematic to get in or out of where you live during busy school hours.

Schools are also littered with screaming children at lunches and recess. This may not be a problem for everyone, but if you work a third shift job or want quieter surroundings with less traffic during the day, you’ll want to think twice before buying a property in the immediate vicinity of a school.

3. Don’t get lured in by the superficial “beauty” selling points of a property.

Most people have an astounding lack of vision. When they walk through a house, all they can see is what’s immediately in front of them, not thinking logically about what they could easily do on their own.

Realtors LOVE to emphasize things like granite countertops and stainless steel appliances – but it’s important to realize, these are not the most expensive parts of a home.

You can put all of these things in a residential property for less than $10,000 – which is a small portion of a house that may cost $200,000 – $300,000 or more. Many homes without these flashy items can sometimes be bought at a much better price, simply because most buyers will overlook houses that don’t look pretty on the surface (and remember, you can easily pay for these improvements yourself after you own it).

Things like windows, roofs, foundations and the infrastructure of a house can cost FAR more to update or correct.

RELATED: My Experience With Window World (Was it Worth It?)

When you order a home inspection report (which you should always be doing before buying a new home), pay close attention to the things that will cost a fortune to fix and update. Every part of a home will expire eventually, so if you’re going to get stuck footing these bills anytime soon, make sure your final purchase price reflects this.

4. You can fix almost anything in a house, but you can’t fix your neighbors.

To the extent possible, try to understand what kinds of neighbors you’ll have next door to (and even down the street from) the home you’re considering. You can even knock on some doors and greet your potential neighbors if you need to.

One particular issue to watch out for is whether any properties in the immediate vicinity are short-term rentals. Get on some websites like VRBO and Airbnb and look closely for any nearby listings for short-term rentals.

RELATED: What Can Mashvisor Do For Airbnb Real Estate Investors?

With short-term rental properties, you’ll have new people moving in and out on a monthly (if not weekly) basis, which means you’ll inevitably have a few odd-ball characters hanging around next door. If this kind of thing rubs you the wrong way at all, it’s best to investigate the situation BEFORE you put down roots and buy your new home.

Don’t get me wrong – I have nothing against short-term rentals (I use them all the time when I travel), but when it comes to the place my family sleeps at night – I want to have as much certainty as possible about who will be living next to me.

5. Spend some time in the neighborhood on Thursday, Friday and Saturday around 6pm – 8pm.

For many of us, we spend the most time at home during the evenings and on weekends. As such, it only makes sense to get a feel for what happens in the neighborhood during this timeframe on the average day (and of course, if you work second or third shift and/or on weekends, you can simply visit during the time when you’ll be at home).

If there is any troubling activity (gangs or troublemakers) or particularly annoying things that happen during this time of day/week (barking dogs, screaming children, neighborhood solicitors, loud traffic, trains, low-flying airplanes, etc.) this kind of preliminary neighborhood research will allow you to identify the red flags of ahead of time.

6. BONUS: When walking through the property, always check your cell phone signal.

Luckily, phones are getting more sophisticated and cell phone tower signals are getting stronger every year. Even so, if you’re looking at a home in a sparsely populated area, or if the property is situated at the bottom of a hill, be sure you’re getting a sufficiently strong cell phone signal.

Few things are more irritating than a weak (or non-existent) line of communication at the place you call home. To ensure you don’t have to deal with this issue in the foreseeable future, always make sure you’re able to get a decent cell phone signal when you’re walking through the property you’re considering.

Final Thoughts

Of course, this isn’t an all-inclusive list of problems that can come up as a home owner, but these are all very real issues that most people never think about until AFTER they've already bought their home.

My goal isn’t to cause any undue paranoia or anxiety, but as someone who has dealt with each of these issues on some level, I can tell you that these things are very real, and if you want to eliminate some stress from your future, it’s worth a few minutes of your time to investigate these things before you make a decision that isn’t easy to reverse.

If something about your new place seems to get in the way of your day to day life, you probably aren’t going to simply “get over it” in the years to come (in fact, it may become even more annoying in the future). No property is perfect from every angle, but when you do uncover what the problems are in your new home, make sure these are issues you’re willing to tolerate – because life is too short to not enjoy the place you live.

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In this live webinar, you’ll get the scoop on how to choose the right market, how motivated sellers think, where to find them and what to say ( including some of the best tips, tricks, stories and lessons you’ll need to know as you start pursuing cheap land deals on your own). You won’t want to miss it!

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About the author

Seth Williams is a land investor and residential income property owner, with hundreds of closed transactions and nearly a decade of experience in the commercial real estate banking industry. He is also the Founder of REtipster.com - a real estate investing blog that offers real world guidance for part-time real estate investors.

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