Let us get one thing perfectly clear: ‘There is no such thing as free lunch’ in this world, and if you want to become rich, buy a mansion, and achieve financial freedom, you must work your way to the top and earn your riches. Real estate investing won’t make you a millionaire overnight. If you want something you’ve never had, you must do something you’ve never done. Pretty simple motto to live by, no? Ingrain this in your memory if you are planning to jump on the real estate bandwagon and become a successful real estate investor.
Don’t pray for a financial miracle in your life; instead, formulate a business plan with realistic goals and strive towards achieving your goals everyday. The process is slow and it will take time, but eventually all your hard work will pay off, and you will start to materialize a life of financial freedom and independence, if and only if, you invest time and energy into acquiring the right knowledge in real estate investing.
The 8 Hard Truths About Real Estate Investing
1. Real Estate Investing Is Not Always Easy
No surprises here! With any new venture you take on in life, you must be able to learn and acquire the right knowledge to become your very own expert. Real estate investing is no exception. Stay on a steep learning curve and seek advice and help from real estate professionals and mentors to speed the learning process. Do your due diligence before you buy your first investment property. Work hard, build your networks, and most importantly, have passion for it. If you don’t have passion for real estate investing, you will not find the motivation and perseverance to weather the storm, especially at the beginning when you are starting out. If you aspire to achieve long-term wealth and become a successful real estate investor, you have to pay your dues first and foremost.
2. Real Estate Investing Is Not Free (This Should Come as No Surprise by Now)
Making money in real estate requires capital, financial resources, knowledge, and experience. Not only do you invest your money, but you must invest your time and energy into growing and running your real estate investments business. The housing market is not static by any means, and, as a result, you must adapt your real estate strategy to stay competitive and profitable in this market. Whether it is buying an investment property in a prime location and/or managing multiple investment properties simultaneously, you cannot achieve any of your goals if you do not strategize accordingly. No such thing as a free lunch in real estate investing, folks!
3. Real Estate Investing Is About Interpersonal Skills
Develop your people’s skills and work on your communication and negotiation style. Be very good at convincing others and getting what you want. Long story short, develop a high level of emotional intelligence in the real estate investments business to seek greater rewards. If you understand how to deal with people and get what you want in return, you are in the right business. Real estate investing is not a one-man show, and it goes without saying how important it is to build your networks and your relationships in this business.
4. Real Estate Investing Requires Patience
Investing for long-term financial wealth and stability in real estate will take time. It will be a slow process, so don’t expect to become a millionaire overnight. The most successful real estate investors build long lasting wealth over time and decades. If it is too easy, know you are doing it wrong. The greatest successes are the accumulation of hurdles and detours. Real estate investors are savvy business people who have figured out the game over many trials and errors. The moral of the story is that there is no success without failure, this is the only way to learn and succeed in the long run.
5. Real Estate Investing Does Not Need to Be a Full-Time Job
Do not quit your day job just yet, because real estate investing is not necessarily a full-time commitment. You can have a full-time job, and simultaneously invest in real estate as a part-time business. If you are starting out, it is especially crucial you keep your day job. Remember, you need the right amount of capital and financial means to invest in and buy real estate. Buying an investment property requires a down payment if you choose to borrow money. Moreover, managing rental property is a lot of work and requires maintenance and upkeep. Also, choosing the right tenants in the right location is crucial to earning positive cash flow return and mitigating your losses. Bad tenants grow your expenses and burn a hole in your pocket.
6. Real Estate Investing Is All About Learning
The more you learn and absorb the right concepts and principles in real estate investing, the better equipped you become to make more informed investment decisions. Acquiring the right education and knowledge is a key determinant of your potential real estate success as an investor. Study the market, follow real estate blogs, read real estate books, and immerse yourself in this industry to get the most out of it. Figure out the price to rent ratio in the housing market of choice before honing down on a rental property. Long story short, become obsessed with real estate to become your very own expert.
7. The Real Estate Market Is Dynamic and Ever Changing
As previously mentioned, the housing market is far from static and because of this fact, you must keep up with the ever changing dynamic and trends to stay afloat and keep your real estate investments business profitable. Understand the housing market where you are buying real estate and capitalize on location to grow your return on investment and gain real estate appreciation. Understand the different dynamic between a buyer’s market and a seller’s market. Buying at the right price in the right location reaps positive cash flow properties for many years down the line.
8. The Start Is Always the Hardest
Every beginning will be challenging, especially in real estate investing. Many people go into it without realizing the amount of hard work required to make it in the real estate investments business. Again, it won’t be easy, but it is well worth it!
Real estate investing is a great business opportunity, but know what you are getting yourself into before you invest your money and time into it. The key is to work smart, not necessarily hard. Do not invest on a whim, be proactive and research your real estate strategy and the real estate property type before you jump the gun. What worked last year may not work this year, and your strategy will have to change and adapt with the current housing market and economic trends.
Do not limit your potential and earning quota. Successful real estate investors think quick on their feet and alter their strategy according to the housing market conditions. Learn from the best real estate mentors and investors, seek advice, and read real estate blogs (especially on Mashvisor) to stay on that steep learning curve.