Successful real estate investors are not born, they are made. So, how do some investors manage to succeed in real estate investing, while others crash and burn almost as quickly as they put down an investment?
The truth is that real estate investing is a difficult area to succeed in, and it requires certain skills and abilities. However, it isn’t impossible to become like the many other successful real estate investors out there. Here are seven principles you need to adhere to in order to become a successful real estate investor.
Be Educated on Real Estate
There is loads of information out there all about the workings of real estate. To be a successful real estate investor, you need to soak up as much of it as you can. It will require effort, time, and maybe even money, but it is one of the best investments successful real estate investors make.
The areas of knowledge you need to familiarize yourself with include how to find the best real estate investments, real estate laws, negotiation tactics, buying an investment property, fixing a renting property, renting out your real estate properties, and eventually selling an investment property. When it comes to being an expert on the numbers involved in real estate, investing tools like Mashvisor can help educate you on things like cash flow, cash on cash return, rental income, and cap rate. While mastering basic concepts is a great start, you should work to gain in-depth knowledge on the following if you wish to succeed in real estate investing:
The Housing Market
Successful real estate investors know their selected housing market or markets inside and out. Information on things like consumer spending habits, mortgage rates, unemployment rates, vacancy rates, and any other relevant trends of the local market will help you to make decisions on real estate investment strategies and find the best real estate investments. This knowledge will give you an advantage over other real estate investors because you’ll be able to make predictions of possible changing trends and make decisions accordingly.
Click here to find the best investment properties in the real estate market.
The business of real estate investing comes with a risk. Every investment you take part in leaves you open to risks that could be financial or even legal. Going in blindly and not knowing what you are risking in detail is a quick way to fail as a real estate investor. The more you study the risk attached to certain housing markets or investment properties, the more you will be able to hone your decision-making skills to lower potential risks.
Related: 5 Risks That Come With a Rental Property and How to Mitigate Them
How Do You Get Educated?
There are a few ways to get this kind of knowledge. You could go to actual real estate classes or simply talk to other real estate investors or real estate agents. There are plenty of books and websites that can help you out as well. Mashvisor’s blog is a great resource that can help you in your quest for real estate knowledge. Experience will also help you gain crucial knowledge in real estate. Just keep in mind that building this kind of knowledge requires consistent upkeep. You have to stay up to date with current lingo, laws and regulations, and economic trends in order to succeed in real estate investing.
Related: How Do Real Estate Classes Help New Investors?
Design a Business Plan
Something successful real estate investors do is treat their real estate investing as a business. One step in doing this is writing a business plan for your investments. This will help you lay out clearly what your short-term and long-term goals are as well as how to go about achieving them. This plan can also detail budget expectations for investment property purchases and rental property repairs. It can outline your expected rental income, cash flow, rental strategy, and expected return on investment. It will help you to execute your plans in the best way possible, without steering off course for any unjustifiable reasons.
Focus on Financing for Real Estate Properties
Successful real estate investors know that having good financing options is key to making any investment. In order to get consistent financing for all your real estate investments, clean up your credit and work on building your credit score.
It’s a good idea to build relationships with lenders (traditional banks or hard-money lenders) to move fast on getting financing. You might want to consider partnering up at times with other investors who have the finances when you don’t, so you won’t miss out on some of the best real estate investments. Real estate partnerships on some of your investments will aid you in building yourself up until you can manage to finance your investment property purchases independently and consistently.
Focus on One Area of Investment
There are so many kinds of investment properties, each with its own elements and risks to understand. Successful real estate investors know to choose one, focus on it, and master it. Do everything you can to become an expert in the real estate investment strategies to obtain a great return on investment in one particular field. Once you do so, you can move on to another field and grow your real estate investment portfolio there. In this way, you won’t be confused or be stretching yourself too thin over the many niches that exist in real estate.
Maintain Good Ethics
While all real estate investors are obligated to follow the laws, regulations, and codes set in place for real estate properties and investing, there is no real control over how ethical an investor has to be. Successful real estate investors, however, are always honest and have good morals. You will be constantly working with people (other real estate investors, real estate professionals, renters, and buyers), and so your reputation will follow you. Always carrying out business with the highest of ethics will help you become a successful real estate investor and build a long real estate investing career.
Work to Build an Extensive Real Estate Network
If you work to build a stable real estate network, you’ll find great support in your ventures. It may be made up of other real estate investors, property sellers, property buyers, real estate professionals, or organizations who share your common interest in real estate. You can meet these kinds of people at the Real Estate Investors Club (REIC) or through your investment transactions. A real estate network will help build your knowledge and even give you a chance to learn about all kinds of real estate investment opportunities that will grow your real estate investment portfolio.
Related: How to Build and Maintain a Real Estate Investment Network
Never Be Afraid to Ask for Help
While comprehensive knowledge of the field is a powerful tool, sometimes you will find that there are questions you can’t find the answer to or problems you can’t solve. Successful real estate investors know there is no shame in turning to someone for help. Finding an experienced mentor, possibly at your local REIC, is a good move. Hiring great lawyers and reputable accountants is a good investment that will save you money in the long run. A lawyer can help you with understanding complicated laws, and an accountant can assist you in the time-consuming task of dealing with taxes. Take advantage of the expertise of others so that you, too, can eventually become an expert.
Become a successful real estate investor with the help of Mashvisor. Sign up now to get started.
Successful real estate investors aren’t born, and they definitely aren’t made overnight. It’s not easy to succeed in real estate investing, but there are steps you can take to get there. You may get lucky on one investment, but the only way to follow the path of successful real estate investors is to develop their habits and stick to them.
One final piece of advice: To become one of the successful real estate investors out there, keep reading on Mashvisor.