Investor Blogs5 Key Factors for a Successful Real Estate Investing Career by Eman Hamed March 26, 2018February 15, 2019 by Eman Hamed March 26, 2018February 15, 2019Many enter the world of real estate investing, but not everyone becomes a successful real estate investor. Why so? Well, while making money in real estate is the best way to build wealth, real estate investing is not as simple as buying a rental property and waiting for it to start generating profits. Successful property investors not only invest their money, but also their time and energy when it comes to real estate investing. Furthermore, there are certain key success factors which need to be taken into account before buying an investment property and starting an investing career. So, without further ado, let’s dive into the key factors that every real estate investor should know for a successful real estate investing career.Real Estate Investing Success Factor #1: Location Every real estate investor must have heard that location is THE key success factor in real estate investing. In fact, successful property investors would often say that the three most important factors to consider before buying an investment property are: Location, location, location! But why so?First, location is constant. As a real estate investor, you may change many things about an investment property, but the one thing you can’t change is the location of your income property! You’re basically stuck in the geographic area in which you buy an investment property until you sell it.The second reason for the importance of location in real estate investing is that it determines the supply and demand: successful property investors always look for locations with reasonable supply and high demand. The supply and demand in the location further determine how much rental income you can charge for your income property and how much your running costs will be. As a result, this will determine how profitable your rental property will be.Lastly, location is a key success factor in real estate investing because it determines appreciation! Land is a limited resource, and it constitutes a large portion of the price of an investment property, and some locations appreciate more in the future.Generally, what makes a good location for real estate investing is a low supply of and high demand for investment properties, relatively low running costs for owning an investment property, high rental income, and an expected good appreciation.Wondering how you can find a good location for real estate investing with the above-mentioned features? No worries, Mashvisor’s rental property calculator will be of huge help in this regard! To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.Real Estate Investing Success Factor #2: Positive Cash FlowIn real estate investing, positive cash flow is the profit made each month from a rental property. The main reason why positive cash flow is a key success factor is simply that the higher the difference between the rental income and the rental expenses, the better the rate of return on investment. Successful property investors always look for positive cash flowing investment properties also because even when the real estate market is going down, the real estate investor would still make money through rental income until the economy recovers. Also, positive cash flow tends to increase with time, allowing income property investors to make even more money from real estate investing with each passing year.In addition, positive cash flow pays down a real estate investor’s mortgage, which leads to increasing the income property’s equity! Not only that, but successful property investor can save the extra income from positive cash flow to use as down payment to buy another investment property. Thus, positive cash flow is a key success factor in real estate investing because it allows income property investors to buy and own multiple investment properties!To start looking for the best positive cash flow investment properties, click here.Real Estate Investing Success Factor #3: Financial Analysis Another important success factor in real estate investing is conducting a financial analysis and understanding the financial aspects of owning a rental property. There are numerous financing methods for buying an investment property – there are mortgage loans, private money lenders, hard money lenders, etc. Successful property investors always analyze the requirements and outputs of each method before deciding on how to finance their investment properties.Related: What Are the Best and the Worst Investment Property Financing Options?Other things a real estate investor should be familiar with include: rental property taxes, payment plans, and mortgage calculation. For successful real estate investing, always identify your current financial situation, your personal financial goals, and the maximum amount of loan for which you are eligible, and set a budget before buying an investment property so you don’t find yourself financially distraught.Real Estate Investing Success Factor #4: Rental Strategy In the world of real estate investing, one of the choices a real estate investor has to make is which rental strategy to follow – traditional or Airbnb. Some income property investors opt for the traditional rental strategy because they consider Airbnb rentals too risky and too much work. However, what really determines which rental strategy is the best is actually the location of your rental property. Some areas are suitable for traditional renting, while others are better suited for Airbnb.Related: Real Estate Investing: Traditional vs. Airbnb InvestmentsThe reason why determining the rental strategy is a success factor in real estate investing is that the rental strategy will ultimately affect your rate of return on investment. For example, when investing in a rental property in a location with a strong tourism industry, a successful real estate investor would invest in an Airbnb (short-term) rental because it would yield higher returns than a traditional (long-term) rental.Mashvisor’s investment property calculator provides income property investors with a straightforward answer to what’s the best rental strategy for any location!Real Estate Investing Success Factor #5: Property Management Great property management is another key success factor in real estate investing. Managing an income property requires time, organization, social skills, and attention to details. By property management, we don’t mean finding tenants and collecting monthly rent. As a real estate investor, you need to determine the best way to advertise your investment property, in addition to conducting a tenant screening process to find the best tenants – the ideal tenant is one who pays monthly rent and doesn’t damage the rental property.Moreover, property management also requires a real estate investor to keep track of repairs, maintain the rental property, and deal with any issues tenants may have. As a real estate investor, if you don’t have the time and energy required for property management, then real estate investing is probably not the best career option for you.An alternative to property management and successful real estate investing is hiring a professional property management! There are many professional property management companies (such as Pillow) which are experienced in managing investment properties and provide a set of services to property investors including marketing, financing, tenancy, repairs, and maintenance. Keep in mind, however, that they do come at a price.Related: The Pros and Cons of Professional Property ManagementThe Bottom LineReal estate investing is one of the best ways to make money, but that does not mean that it’s an easy career. What differentiates successful property investors from the average ones is the time and energy which they put into their investments. Moreover, every real estate investor should know the above-mentioned key success factors and take them into consideration if he/she wants to join the class of successful real estate income property investors.Mashvisor provides real estate investors with the best tools they need to find and analyze the best investment properties and make smart investment decisions. To learn more about all aspects of real estate investing, continue reading our blog.Click here to start your 14-day free trial with Mashvisor and subscribe to our services with a 20% discount after! Start Your Investment Property Search! START FREE TRIAL Start Your Investment Property Search! START FREE TRIAL Cash FlowFinancingLocationRental ManagementRental Strategies 0FacebookTwitterGoogle +PinterestLinkedin Eman HamedEman is a Content Writer at Mashvisor. With a focus on market reports, she enjoys researching the state of the real estate market in different cities across the US. Eman also writes about trends, forecasts, and tips for beginner investors to gain the confidence and knowledge they need to make wise decisions. 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