Real estate investment is a great way to increase your monthly cash flow and create an investment portfolio which will carry you well into retirement—if it is done correctly, of course.

As with all investing, real estate investing can be risky for novice beginners, but with the right attention to detail and strong will, it can be well worth the risk in the long run. In fact, most real estate investment fails can be chocked up to one of four common mistakes. These mistakes are usually easily avoidable for most investors who do their due diligence.

So, what are these common mistakes and how can you avoid them?

Winging It

When investing in real estate, it is vital to go into it with a clear understanding of what you are looking to get out of it. Having a clear-cut goal laid out will help you in choosing the right market, the right property, and the right property management company. Many first-time investors go into the industry without an understanding of what they want to get out of the business. Sure, they know they want to make a profit—but what kind of profit? Do they want to collect a higher monthly revenue and make less profit on the backend or are they looking to purchase property that will provide a larger payout in several years? Do they want to rent to college students and tourists or are they preferring a solid, secure family unit that will remain in the home for many years?

Knowing what you want and having a solid focus on achieving it will help you weed out any properties that may be a waste of your time or not worth the cost in the long run.

School’s Fool

Not doing any research before making an investment is perhaps one of the biggest mistakes an investor can make. There are so many factors that you, as an investor, should know in order to ensure you are getting a good deal. Thoroughly research the national market so that you can narrow down an area you want to invest in the most. Then, research that market. Know it inside and out. What are the rental rates in the area? What is the rental demand? Does the area have a good appreciation value? Are there any upcoming city-wide projects that may affect your property’s value, whether negatively or positively? How are local property taxes compared to the national average? Are there any tax breaks offered to investors?

Not understanding the industry or the local market is a sure kiss of death for any investor. Do you research, do your due diligence. Even if you are thinking of hiring a property investment company, you should have your own understanding of the market in order to prevent any less-than-honorable company from taking advantage of you.

Not Enough Capital

To make money, it takes money they say. While there are some no-money down programs that can help investors get started without having to save for decades, it is always important to have reserves. First, having a decent capital set aside will help make you a more secure borrow in the eyes of a bank. This will often give you a lower percentage rate than financing with no capital backing. In addition to giving you a lower percentage, having a decent reserve in the bank will save you from going bankrupt if any unforeseen expenses pop up or if you run into a period of extended vacancy.

Calling it Quits

Any investment, real estate or otherwise, generally takes time. It is not a get-rich-quick scheme by any means. Many investors tend to get discouraged quickly and get out of the industry long before they reach the opportunity to recoup their investment. Real estate investment requires dedication and, most of all, time.

When it comes to real estate investment, the most common mistakes are usually simply avoided by a little due diligence. Research the market, the property, and the industry long before you dive into any purchase. Knowing what you want and how you are going to achieve it will also help keep you focused and on the path to a successful investment career, and stop you from making any of these common mistakes.