The term unfair advantage is widely used to describe any entrepreneurial ventures or startups. It is an ingredient for success when starting a new business venture. Real estate investments require entrepreneurs to hold such a powerful weapon. Successful real estate investors must carefully choose the best real estate investment strategies in order to get to their desired destination. After all, a real estate investor with an unfair competitive advantage has a higher success rate and a better-established market share.
So, What is the Nature of an Unfair Competitive Advantage?
A competitive advantage is what sets your business operation apart from competitors; it mainly lies in the characteristics that can differentiate your product or service from others in the same market. What makes a competitive advantage unfair is the inability to replicate the competitive advantage that your business operation offers.
According to J Barney (1991), to create an unfair competitive advantage, your service or product needs to be:
Valuable
Rare
Inimitable
Non-substitutable
How Can You Translate Unfair Competitive Advantage into Real Estate Investments?
A real estate investor should always distinguish himself from others in the trade. Here are few key points to highlight your real estate investments and give them an unfair advantage:
Smaller is Better
When it comes to making smart real estate investments, defining a local area within a town or even a state can help your real estate investments and help you find the best place to buy investment property. Being focused on a smaller area can give a real estate investor an unfair advantage to other competitors in the area. As a real estate investor, the location of your investments will reflect on the success of your business. By localizing your investments in a specific location, you will become dominant in the real estate market within it.
Moreover, for an investor looking to invest in rental properties, no matter how small the investment is, he/she must find the optimal rental strategy that best suits the property’s needs and his/her needs at the same time. This competitive advantage will require an investor to plan and think five steps ahead. A real estate investor does not have to go across the country to find great real estate deals.
Related: The Advantages and Disadvantages of Buying Rental Properties Close to Home
Incorporating Technology into Decision Making
The use of technology and predictive analytics is becoming of great importance in today’s real estate market. This could be a major competitive advantage in finding the best real estate investments. An investor can review a property’s full history and review predictive analytics for a specific property. This becomes an advantage for any young investors who rely on technology in their decision-making process.
Mashvisor utilizes technology to help an investor make a well-informed decision. Mashvisor’s real estate market analysis and investment property analysis offer an encompassing service package that guides investors to make smarter real estate investments’ decisions.
Related: The Use of Predictive Analytics in Real Estate Investing
When an investor chooses technology to aid him in investment decisions, it lessens the effort on his behalf and pushes his skills to a whole new level. Mashvisor’s real estate market analysis gives a detailed description of the property’s financial status in the real estate market. Moreover, this analysis is conducted through a highly accurate investment property calculator that lists many market metrics investors may overlook otherwise, such as return on investment which indicates the percentage of money that’s returned from the investment after calculating the costs.
Related: 6 Must-Have Real Estate Investment Tools
Study the Law Extensively
America is a land governed by laws, and these laws and regulations form a complex web that regulates all matters within the country. Real estate investments are no exception to that rule. Therefore, becoming an expert in the laws can easily be transformed into an unfair advantage for the real estate investor.
Whether you have studied law in school or not, knowledge of laws and regulations that control real estate investments can be beneficial for business.
Related: Landlord-Tenant Law: Basics Every Real Estate Investor Should Know.
Experience and Knowledge in Construction
Knowledge in construction could help a real estate investor to invest in fixer uppers, which leads to a better estimation of the value of the property and understanding the costs that fixing the property requires. If a real estate investor can gain knowledge in construction, he will be able to maximize his profits through minimizing costs.
This unfair advantage requires time and effort to obtain. If a real estate investor was a contractor, this can be a major unfair advantage to others in the market as he will be able to utilize his expertise.
Cash is King
It is widely known that business conducting changes greatly when talking in cash. An investor looking to buy real estate investment properties in cash is going to save a hefty amount of cash. This can easily be turned into an unfair advantage when financing real estate investments.
If you are wondering how to be successful in real estate investing, the answer is as simple as cash. The ability to pay in cash may not be accessible to most real estate investors, but for the ones that have it, it can cut away many steps necessary when financing real estate investments.
Become a Marketing Expert
Marketing has become a necessary part of conducting any type of business. It is a process that helps define all possible prospects which makes it easier for an investor to find the best investment deal. Becoming a marketing expert through marketing your business can certainly be a major unfair advantage to others in the industry.
Marketing your real estate investments can be done in numerous ways. It includes your personal presentation at business appointments, and even in the way you dress. Technology has lowered the cost of marketing and made it flexible to all kinds of business. It can also be about advertising, street signs or any other way that can generate a cash flow.
Creating an unfair advantage for your real estate investing business can be done through differentiation and excellence in any aspect of the trade, which is easily attainable through exploiting any real estate investment tools available to the real estate investor.
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