Unlike going on a road trip where you know where you are going, real estate investing does not come with any maps. It’s not like an appliance that comes with an instruction manual that can help you make the most of it.
You will have a hard time navigating the real estate industry if you don’t arm yourself with enough knowledge about it. On top of doing research, you should also seek counsel from those who have more experience in the industry.
How You Can Succeed in Real Estate Investing
We asked a few real estate industry insiders if they could share a few tips with us about real estate investing. Here are the top tips that they gave us:
Tip #1: Have clearly defined goals and a plan before you get started
As in everything, if you want to succeed, you should have a goal to measure your progress against. Have a specific set of goals you want to achieve as a real estate investor. Whether it’s a particular amount you wish to raise or a certain number of properties you want to acquire and resell.
Whatever it is, have a finish line in mind. It will help you identify and outline your strategies and action plans to reach your goals. This will, in turn, keep you focused on the essential things and away from distractions — the more specific the goals, the more specific the strategies.
Tip #2: Take advantage of technology and make it work for you
Technology is one of the boons we have in this world today. It has made our lives a lot better and easier. It’s not just there to wow us and keep us entertained. It’s there to be utilized for work and business, too, so do not think that it has no bearing or contribution to real estate investing, especially now that we’re in a pandemic and mobility is far more challenging.
Use technology to your advantage. Set up meetings and virtual property walkthroughs online. Get your research on properties, procedures, and other strategies online. Coordinate with all parties involved in the deal via messaging apps on your computer and digital devices. Download apps that will help you get started in investing.
Technology will be one of your greatest allies, so never take it for granted.
Tip #3: You need an excellent team to work with if you want to succeed in the game
As the old saying goes, teamwork makes the dream work. To succeed in real estate investing, you need to surround yourself with people that will guide you and have your back every step of the way. It can be a veteran real estate agent, a consultant with years of extensive experience, a reputable mortgage loan officer, or a wise mentor to keep you in check. Tapping the right people and getting them on board your team will take your game notches higher.
Tip #4: Know your market and have a clear understanding of your costs
Once you’ve formed your team, it’s time to put in the work: research, research, research. Arming yourself with all the necessary knowledge related to the industry and market you’re in will increase your chances of getting the top deals and giving potential homebuyers some of the best options in a location.
To get there, you need to identify your market type and the neighborhood the property is in. Then you need to know how much updating specific properties will cost you, from renovation to paperwork. It will help you see if you’re still within the reasonable, fair market value for a particular market.
For instance, one of the most common mistakes investors make is to go all out with the home improvements without really considering the type of neighborhood a property belongs to. These properties would often get exorbitant price tags because the investor wants to have his or her ROI and profit. However, the houses end up overpriced for their location because of the steep prices, making it a lot harder — almost impossible — to sell for the investor’s asking price.
If there’s one thing you should never cut corners on, it is this stage. The proper knowledge will allow you to make the right business and investment decisions.
Tip #5: Always have contingency plans
Lastly, if there’s one thing that this pandemic has taught us, it is that we know not what the future holds. So making assumptions based on optimism without taking into consideration life’s realities is a significant mistake.
Contingency plans need to be put in place if things don’t go the way you want them to. Plan As need to have Plan Bs, Plan Bs need Plan Cs, and so on. In this industry, preparedness is a significant component of success. If you fail to plan, you plan to fail.
Real estate investing is not as easy as investing in stocks, forex, mutual funds, and other similar investment products. It takes a lot more effort to look for a suitable property, get it up to standard, have it appraised, and get it listed. Those who are seriously considering it should be prepared for all the challenges that go with it. But once you go all in and do it right, the rewards you reap will be well worth it.