New investors often trip on the same predictable problems. Here’s a deeper look at five common traps and practical fixes.

1) Overpaying for properties

Why it happens: emotional bidding, fear of losing a ‘good’ deal, or poor comps.
How to avoid: run a deal analysis (projected cash flow, repair budgets, comps) and set a walk-away price before you negotiate.

2) Ignoring hidden costs

Typical hidden costs: deferred maintenance, HOA special assessments, higher insurance in flood zones, stove/AC replacements, legal fees.
Fix: build a conservative budget including a 5–10% vacancy allowance and a 10–15% repair contingency.

3) Failing to screen tenants

Risks: late payments, eviction costs, property damage.
Screening process: ID verification, credit check, employment/income verification, references from previous landlords. Use a written rental application and consistent criteria to avoid discrimination claims.

4) Neglecting location analysis

Problem: good cosmetic features can’t overcome a poor location.
What to check: schools, walkability, transit links, crime trends, planned development. Drive the neighborhood at different times and talk to local property managers.

5) Underestimating property management

Reality: managing tenants, repairs, and emergencies is time-consuming and drains inexperienced owners.
Solution: either learn systems (online rent collection, maintenance vendors, legal counsel) or budget for a professional property manager (usually 6–12% of rent).

Closing note

Avoiding these mistakes is largely about discipline: run the numbers, prepare for surprises, and prioritize systems over shortcuts.