If you're thinking of expanding your portfolio to include real estate, there a few key tricks of the trade to keep in mind and some easy mistakes to avoid. Many investors, when they jump into real estate for the first time, fail to grasp the dynamics of the area they are investing in. The first-time real estate investor should also keep in mind long term goals and be aware of the diligence required in keeping up properties so they are marketable. One of the best ways to keep focused on both long and short-term goals is to consult an accountant.

There are essentially four ways to make money in real estate: income from rent, value appreciation, growth in equity (percent of ownership) and tax benefits. An accountant can guide the novice investor to pay close attention to these variables and guide a portfolio in the most lucrative direction. Aside from adjusting rents and expenses to maximize operating income, the balance sheet (a compendium of the variables mentioned above) should be constantly tweaked to maximize asset performance.

Paying close attention to portfolio indicators can also increase the speed with which properties become sources of wealth and tax efficient. Going over a balance sheet with an accountant helps the investor keep a running tab on how well properties are performing. Experts say the key ratio to watch is the return on equity (ROE) rather than return on investment (ROI).

Investors must also learn to get out of bad partnerships and bad investments quickly, before they become a liability. Warren Buffett, billionaire investor extraordinaire, says, "The first rule of investing is learning not to lose."

This may be often easier said than done, but when several things go wrong right off the bat, it's time to cut your losses. One of the worst things an investor can do is become too attached to a particular investment, to the point where it clouds their judgment.

The same goes for partnerships. When a business partnership starts to erode - especially when the partner is family or a friend - things can get sticky, possibly leading to the lawyers getting called. Like dating, to be successful in business, the investor has to quickly nip bad relationships in the bud.

Investing can be a bit like gambling - the more risk involved, the bigger the potential payout. If the investor lacks experience, however, the long-shots can lead to disaster. Bottom-line: don't get in over your head. Be patient, the bigger and better you become, the bigger and better opportunities will come along.

Having a long-term plan in mind is one key tenet of investing. Often investors can become mired in a situation where they are "dirt-rich but cash-poor," meaning they have a lot of land but no money to spend on it. This is often the case when your properties are having mixed results - the gains on some are covering the losses on others. Keep the portfolio in close check and don't be afraid to trim the hedges once in a while.

Like politics, real estate could also be described as "all local." Smart investors read the local trade publications, eye neighborhood trends, stay in the know about all that they own. Property value is, by and large, determined by the conditions on the ground - by rental rates, occupancy, competition and an area's demographics. Look at trends - try to see the train coming before it passes you by.