Investing in real estate is one of the better investment ideas that you could ever come up with. Reasons behind this are quite numerous, ranging from the fact that you can create a passive income to last you a lifetime all the way to enjoying numerous tax advantages that come with the industry. Still, if investing in real estate is so great, what prevents everyone from making money this way? What separates a successful real estate investor from those less fortunate ones. Well, there are several traits and here are the eight most important of them.
1. Being passionate about what you do
A lot of people see passion as something quite subjective, abstract and outright hard to pinpoint. What they fail to understand is the fact that passion is the fuel that keeps one going, it’s what gives you the energy to move forward. What the majority of people find fascinating about this industry, in particular, is the challenge itself. First of all, the field is quite competitive and making it against such a tough opposition might bring one a strong sense of accomplishment. Others are passionate about the lifestyle that comes with the income of a successful real estate investor. Lastly, there’s something deeply humane and altruistic about being a part of the housing industry (provided that you’re a residential and not a commercial investor).
2. Having enough patience
Another thing that’s important to mention is that patience isn’t just knowing how to wait, it’s about knowing what’s worth your time. You see, time is a finite resource, and it’s a resource that will be one of your main assets in the field of real estate investment. For instance, let’s imagine a scenario where you’re investing in a rental property. Ideally, a rental property returns 1 percent of its value every month, which means that it will take about 8 years for you to reach a break-even point. That is, however, provided that you don’t count the investment in maintenance. On the other hand, this is something that creates a passive stream of income and is definitely worth your while.
3. Planning ahead
Some of the people who are planning for major profits and can afford to invest some money, in the long run, may be willing to wait for decades before capitalizing on their investments. For instance, if you were to read on the city council’s development plans by the year 2035, what you would be able to do is make some plans up ahead and invest in properties that are currently not worth much but whose value might skyrocket in the future. While these properties are not as hard to find, especially with the right help, the truth is that not a lot of people have the luxury of relinquishing these kinds of funds for such a long period of time. This is what separates the best from the rest.
4. Being tech-savvy
In 2019, as an entrepreneur, you need to be ready and willing to make necessary adjustments to your business model and turn more towards the technology. For instance, in the fundraising process, knowing how and where to look for personal loans online can open up so many new options for you. Other than this, for the real estate investor, there are so many industry-specific platforms, ranging from those that allow you to see dynamic prices of the rent in the area, all the way to those that help you with the vetting process of potential tenants. Then, seeing as how a successful real estate investor needs to be a great networker, as well (something we’ll discuss a bit later), technology can help you have more efficient communication, as well as be available 24/7.
5. Efficient at networking
Regardless of how you plan to make your money in the real estate industry, what you need to understand is the importance of surrounding yourself with the right people. For instance, if you plan to fix and flip a property that you’ve just bought, you need to know reliable contractors that can deliver on what was promised with a 100 percent guarantee. As a landlord, you need to have emergency electricians, plumbers, locksmiths and general contractors on speed dial but this is not where your list of contacts ends. For those investing in industrial property, having a contact at the mayor’s office or in a city council can be life-saving.
6. Knowledge of the industry
Let’s be completely honest, this is one of the most important factors for success in any industry and it’s something that can determine your ability to recognize an under-valued property by understanding the economic factors that drive a market. It is something that can help you understand the directions that various trends are taking and the ability to organize your managerial apparatus in order to ensure that everything runs as smoothly as possible. All in all, this is something that is supposed to act as prerequisites for entering the industry in the first place. For those who aim to take baby steps, there are plenty of resources online that can serve as a starter pack.
7. Ability to recognize the opportunity
Previously, we’ve mentioned that recognizing the opportunity usually comes from your knowledge. Yet, your ability to analyze the market isn’t always what yields the ultimate results. Sometimes the trend will shift all of a sudden and it’s up to you to recognize the opportunity. As Roman philosopher, Seneca once said: “Luck is what happens when preparation meets opportunity”. For this very reason, you need to have reliable fundraising methods, acquaintances and methods to leap on this opportunity as soon as you notice it.
8. Ability to focus on objectives
As an investor, you need to assume a stance that you’re the one running a small independent business and that you need to act in this manner. This means writing a statement and listing all your goals and objectives. From this point on, it’s your job to do all that’s in your power to realize these goals of yours one at a time. By staying focused on what you want to achieve, you’ll drastically increase the efficiency of your decision-making process.
Frankly speaking, sticking to these vital rules is something that can help you become successful in life, regardless of the aspect of the field that we’re talking about. Therefore, you need to start developing these traits as soon as possible and one day, you too can become a successful real estate investor.
This article has been contributed by Amelia Atkins.