Buying real estate is one thing—protecting it for the long run is another.
Too many people work hard to buy a home or rental property, only to lose money due to avoidable mistakes. Whether it’s unexpected costs, poor financial planning, or legal missteps, these mistakes can wipe out years of hard work.
In this conversation, we discuss how to protect your real estate investments, keep your home in the family, and avoid financial pitfalls that could cost you thousands.
Mistake #1: Not Having a Will or Estate Plan
One of the biggest reasons families lose inherited property? There’s no legal plan in place.
- Without a will, your home could go to probate court. This means legal battles, high costs, and the risk of losing the property entirely.
- Unclear ownership can lead to family disputes. If multiple heirs inherit a home but don’t have a clear plan, disagreements can force a sale.
- Predatory investors target families without estate planning. Many companies try to buy inherited homes for cheap when families aren’t sure what to do next.
Fix it:
- Work with an attorney to create a will or trust.
- Clearly outline who inherits the home and under what conditions.
- Set up a transfer-on-death deed (if available in your state) to avoid probate.
Mistake #2: Underestimating Homeownership Costs
Too many first-time buyers only budget for the mortgage payment—but owning a home comes with additional costs:
- Property taxes – These increase over time and can be a major financial burden if you’re not prepared.
- Repairs & maintenance – Roof replacements, plumbing issues, and HVAC systems can cost thousandsunexpectedly.
- Homeowners insurance – Protecting your property isn’t optional, and rates fluctuate based on location and coverage.
Fix it:
- Set aside 1-2% of your home’s value per year for maintenance.
- Research property tax increases in your area to avoid surprises.
- Make sure your homeowners insurance covers major disasters like floods, fires, or earthquakes if needed.
Mistake #3: Refinancing or Taking Equity Too Early
Home equity can be a powerful tool—but misusing it can put you in a financial trap.
- Cash-out refinancing can lead to more debt. If you pull equity out of your home but don’t reinvest it wisely, you could end up owing more than your house is worth.
- HELOCs (Home Equity Lines of Credit) aren’t free money. Interest rates can change, and if you borrow against your home without a solid plan, you risk foreclosure.
Fix it:
- Only tap into home equity for wealth-building moves (investing in property, renovations that increase value, etc.).
- Avoid using home equity for luxury purchases or unnecessary expenses.
- Make sure you understand the long-term financial impact before refinancing.
Mistake #4: Not Treating Rental Properties Like a Business
If you’re using real estate to generate income, you need to treat it like a business—not just a side hustle.
- Not screening tenants properly can lead to eviction problems.
- Not keeping financial records can hurt you at tax time.
- Not setting aside funds for vacancies can put you in financial trouble if a tenant moves out.
Fix it:
- Always do background and credit checks on tenants.
- Keep a separate business account for rental income and expenses.
- Budget for at least 1-2 months of vacancy per year to stay financially secure.
Final Thoughts: Real Estate Is a Long-Term Game
- Owning property is only the first step—protecting it is just as important.
- A little planning today can save you thousands in the future.
- Your real estate investments should serve you and your family for generations.
Watch the Full Conversation
Want to learn how to keep your real estate investments secure? Watch this part of our discussion here:
Video Timestamp: 00:53:30 - 01:02:10
In Part 9, we’ll discuss how to pass down wealth through real estate—and make sure your family benefits for generations.
#Realtor #RealEstateAgent #FirstTimeHomeBuyer #InvestmentProperty