Whether you are a fledgling investor, looking to make your first deal or a seasoned investor, chances are you could use a few tips to make your investments a success. Many people view real estate investment as a quick and easy way to make money, when in fact it requires a lot of work and know-how. Here at Lofty, we know that knowledge is power so we have gathered a list of habits that successful real estate investors have in common.
1. They Treat Their Investment Like A Business
Real estate is an investment, and successful investors know this. Like any successful business, they have a business plan with set goals. Outlining what you want to accomplish through real estate will help guide you toward what you want. Putting in place both short-term and long-term goals will help you keep your eye on the prize when you experience a minor setback—and you will probably experience your fair share. However, this is all part of growing your successful business. In addition, do not forget to add new goals as you accomplish the ones you already have in place
2. They Are Realistic With Time Management
Real estate investment can be time consuming and successful investors are aware of this. It is not uncommon for a young investor to bite off more than they can chew by taking on too many properties quickly. As experience grows, so does the ability to handle a larger portfolio.
The learning process, property management, and other details related to running a business will all take more time than many realize. When you are first starting out, it is likely that you will still have your regular full-time job and running your real estate investment business will be done during your off time. You could quickly find yourself overwhelmed if you do not take things one step at a time and pace yourself.
3. They Invest In Their Education
Successful real estate investors do their research. They are constantly staying up to date on the current market trends. Not only that, they also stay up on what is going on outside of real estate: How is the economy; What is the unemployment rate; How are the schools in the area; What is the crime rate? All of these things affect real estate value and ultimately rent prices and successful investors know this. Staying up to date on these things helps you be prepared and aware of potential problems or potential opportunities.
It is somewhat common to think that if you can, you should. However, if you are capable but unskilled, the time it takes to complete a task quickly compounds. Consider your options and compare against the value of your time. You may find that it is cheaper to hire someone skilled than to attempt to save money by doing it yourself.
4. They Are Niche Experts
There is a familiar saying: “Do what you know,” and successful real estate investors agree. Becoming an expert in a certain area of real estate allows you to develop expertise that is important to long-term success in real estate. A diversified portfolio is important in any type of investment, so once you become confident with your expertise in one niche, use the same approach to mastering another. In his book Outliers, Malcolm Gladwell states that it takes 10,000 hours to become a master in a specific area. Keeping this in mind can help if you find yourself becoming impatient.
5. They Seek Advice From More Experienced Investors
Books are helpful, but a large part of real estate investment is learned through experience. Successful real estate investors know the importance of building a network of other people involved in real estate. Adding a mentor who is more experienced to your network will give you someone to bounce ideas off of and seek advice from. Think of your business network as your own personal “think tank”; a community of like minds who all want to see each other succeed.
6. They Operate With High Ethical Standards
If you want to be successful in real estate, expect to be in it for the long haul. In order to last in this business, it is important to hold yourself to a high level of ethics and standards. There are times where it might be easier to misrepresent a property or take advantage of a situation, but in the end the truth always comes out. In this business, a good recommendation goes far, but a bad one goes even farther, and can be incredibly damaging to your reputation. Successful investors know that important ethical business practices are imperative to creating a successful and long-lasting business.
7. They Know Relationships Are Key
A major component of investing in real estate is working with people. And not just renters! Anyone with whom you have a business relationship should be treated with respect, courtesy, and patience. Successful real estate investors are also successful customer service providers. It is important to listen and pay attention to detail. Should a problem arise, handle it courteously and as timely as possible. Happy renters and other individuals with whom you have business or professional dealings are the best promoters of your business. In the same respect, maintaining a positive relationship with vendors is just as important; professional and prompt communication will insure that they continue working with you and referring others to you as well.
8. They Know Where to Best Spend Their Time
In general, successful people know the limits of their expertise. So, it stands to reason that successful real estate investors will eventually reach that point. One of the first people whose advice you want to seek is that of a reputable accountant. It is important to find someone that has a demonstrated understanding of current tax laws who you can trust to handle your books. Doing this right away will keep your finances in order and save you money in the end. Successful investors also establish a professional relationship with a lawyer whose services are useful in drawing up contracts, leases, or eviction proceedings should the need ever arise.
Real estate investment is hard work and if done correctly in the end it can be quite lucrative. If you just read this list and thought to yourself, “Wow, I really want to invest, but I don’t think I have the time.” Or maybe you just are not sure where to begin. Here at Lofty we are here to help you every step of the way. Whether you are a newbie that wants to invest but does not know where to begin, or a veteran investor that wants to take a step back and let someone else take the reins, give us call and learn how we will leverage our expertise and experience to create a plan that is right for you.
Whether you just need to find the right tenants for your investment property, or you want everything managed from top to bottom, live the life you deserve and let Lofty handle the rest.