Real estate can be a very lucrative and rewarding business. However, it can also be extremely stressful and frustrating, especially for the beginner real estate investor. Buying your first rental property, paying your mortgage, finding tenants, and managing a rental property can be very overwhelming. Studies have shown that many people don’t even make it past the first year in real estate.
To help you survive your first year in real estate, we’ve put together 9 tips:
1. Expect Long Hours
The conventional 9-5 working hours do not usually apply in the real estate business. Successful real estate investment requires putting in long hours, especially after making your first real estate investment. In order to grow your business and keep up with the competition, the initial period will involve a lot of learning, prospecting, networking, and even fundraising. In many cases, you will have to adjust your timings to fit your associates’ schedules. This could mean early morning or late evening meetings. Such unpredictable hours will require sacrificing your comfort and leisure in order to get the work done. However, if you persist in your first year in real estate and keep going, your labor will be well rewarded.
2. Invest in Learning
As a first-time real estate investor, it is very important to learn real estate lessons. For example, you need to learn how to find investment property for sale, market your rental properties, negotiate with buyers or sellers, and manage property. In addition, you need to understand things such as occupancy rates, rental property costs, investment property analysis, cap rate, and cash on cash return. The good news is that you don’t have to spend money on seminars and classes. The best way of learning is through audiobooks and podcasts. You can listen while cooking, driving, exercising or even showering. Getting information before buying your first real estate investment property will help you avoid mistakes.
To learn more about how we will help you make faster and smarter real estate investment decisions, click here.
3. Identify Your Ideal Buyers
Being able to identify your target market is very important in your first year in real estate. This will help you avoid wasting time following up with prospects that are not likely to buy. Your housing market target audience should not only be a profitable niche, but also people that you enjoy working with. For instance, you could say that you are targeting people that are 35+ years old, with young families, and earning at least $2 million. Make sure all the elements of your real estate marketing and branding speak directly to these people. The more specific you are, the higher your chances of selling your first rental property quickly.
4. Find a Mentor or Coach
The first year in real estate can be very intimidating for most people. This is why it is very important to have a person that will hold your hand and guide you towards a successful real estate career. A mentor or coach will help you create a real estate business plan, as well as boost your confidence, determination, and competitiveness. You will learn from their mistakes, and thus avoid the common pitfalls of the real estate business. In addition, a mentor or coach can be a very important source of information about people and resources that will boost your business.
When choosing a mentor, find someone that has proven results in the real estate industry. Check out their social media profiles and websites to learn more about them. Don’t forget to read online reviews by their former customers if they are a real estate agent. The mentor should not only be experienced but also available when you need them. Finally, it should be someone that you truly admire, respect, and look up to.
5. Build a Network
Besides having a mentor or coach, building a strong network is very important in your first year in real estate. This network should be made up of trusted professionals that you can connect with in times of need. A mortgage lender, real estate agent, contractor, home inspector, and property manager are some of the people you need in your circle. One of the best ways to connect with such people is by attending industry events such as trade shows, seminars, and workshops.
6. Be Ready to Wear Multiple Hats
In your first year in real estate, be ready to play multiple roles in the business. First, you will need to set goals for your business and have a way of monitoring your progress. You will probably be responsible for getting your investment properties listed and running a marketing campaign for visibility. When potential buyers want to see the investment property, you might have to show them around yourself. If you get tenants, you could be responsible for creating rules, collecting rent, dealing with maintenance issues, and handling evictions. Being prepared for these roles will ensure that you don’t get overwhelmed in your first year in real estate.
7. Avoid Social Isolation
With the long working hours and demands of the business, the life of a real estate investor can be a very lonely one. This is especially the case for people that are leaving office jobs where they were always surrounded by people to venture into real estate investing. Your circle of friends is likely to shrink dramatically, leaving you with very few people to socialize with. With time, you are likely to find yourself becoming more and more of a recluse. To avoid this, be sure to incorporate fun events and meetups in your schedule.
8. Have a Schedule
Creating a schedule and sticking to it is very crucial for success in real estate investing. When are you going to read real estate books? When will prospecting be done? When are you going to post on social media? When will you meet your mentor? All such things that need to get done should be put in a schedule.
9. Watch Your Finances
Running a real estate business can be a very expensive affair. With costs such as web design, mortgage, broker fees, home association fees, licenses, and advertising, your first year in real estate can be very financially draining. Property investors that are not prepared for such costs are likely to go broke within a very short time. Therefore, when getting started with real estate, avoid spending too much, and thus placing yourself in a financial quagmire.
If you have ever asked ‘How will I survive my first year in real estate?’, this article answers your question. Applying the real estate tips mentioned above can make your first year more bearable and boost your chances of success.
Want to buy another investment property in your first year of real estate? Read How to Buy Multiple Rental Properties in a Single Year and use our Property Finder to find lucrative investment properties that match your criteria in a matter of minutes!