Investing in real estate has long been regarded as a pathway to wealth, but what sets successful real estate investors apart from the rest? Unlike casual property buyers, these astute individuals approach real estate with a unique blend of patience, research, and strategic thinking. This blog post delves into the core practices and principles that successful real estate investors consistently follow.
From thorough market analysis to leveraging professional networks, and maintaining a long-term vision, we’ll explore the key habits and strategies that enable these investors to not only survive but thrive in the dynamic world of real estate. Whether you’re a seasoned investor or just starting out, understanding these practices can significantly impact your journey towards real estate success.
Know The Market
First of all, successful real estate investors do their homework and get to know the market. What this means is looking at the prices of properties similar to the one you are considering, and in the same area as you are looking at going for. The good news is that it’s even easier to do this than it’s ever been as many online real estate platforms will provide you with a current valuation of a property as well as the last price it went for.
Of course, as well as having a good understanding of the local property market before you make a real estate investment you will also need to consider the financial market at large. This is because any mortgage you will pay will be dependent on interest rates. Therefore to know whether you can afford a property over the long term you will need to factor in the potential rise in mortgage payments if interest rates go up.
Consider Both Location and Affordability
Most real estate investors are primarily concerned with location. This is because traditionally a good location for a home has been the thing that indicates the most value. However, this preoccupation with location only may not be that useful for all investors, especially those who hope to provide affordable accommodation for renters.
Happily, there are still developers like The Millennia Companies that are creating excellent quality multifamily apartments at an affordable rate. Indeed, these apartments are a great choice both for homeowners and investors alike as they also offer access to resident services and a high standard of living.
Know How They Will Monetize Their Property Before They Close
Yep, just buying a property without carefully considering how it will make you a good return is never a smart idea. To that end be sure to cost out each option from flipping to leasing to holding the property you plan to buy to see which is the most profitable.
Work Within a Niche
Another smart move that any real estate investor can make is to niche down and specialize in a particular type of property. For example, if you choose to buy an old house that needs renovating, you will gain experience in this and build your reputation. Then customers will be much happier buying from you and you will be able to flip properties much faster realizing a greater profit on each one.
Understand The Risks
Real estate investors also need to fully understand the risks before they embark on buying a property. This is because even though real estate is often seen as a much more reliable investment because you are putting your money in bricks and mortar rather than an ‘imaginary’ asset like Bitcoin, it’s still possible to lose it.
Indeed, the property market goes down as well as up, and in many cases, issues known as property bubbles can leave investors out of pocket when they buy at a high rate, and then the bubble bursts. To that end, just like with every other type of investing, you should not invest money in real estate that you cannot afford to lose.
Invest in an Accountant
Chances are you already groan internally at the thought of doing your taxes, but add property investing and developing to the pile, and you will make tax season infinitely more challenging.
With that in mind, employing an accountant or tax professional to help you out can be a real lifesaver for the real estate investor. This is because an accountant will be able to help you fulfill all your tax needs and ensure you stay compliant while also freeing up your time to allow you to work on your investments and renovations.
Build a Network
Last of all, as a real estate investor knowing lots of people that can help and advise you on each different part of the process is invaluable. There are many people that you’ll want in your network as a property investor including real estate agents, mortgage advisors, tradesmen, and construction workers.
You may choose to build and manage your network online via platforms like Linked In. Then you will be able to quickly access anyone you need to contact. Just remember that network connections you can rely on rarely come for free. Indeed, in the property investment and development world offering your expertise today could save you a fortune tomorrow so be sure to be generous with your time and knowledge where you can.
