The age-old question in the world of real estate is: What does it take to make an investor successful? A person who knows what he wants personally and financially, a go-getter, a risk taker. Success can never be predicted with college degrees and PHD’s, but there are a few ways you can secure your investment on the path to a successful real estate investor.
Joint ventures, wholesaling and property management are just a few of the ways investors can profit from real estate, but it takes a little savvy intellect to become successful in this competitive arena. While certain universities do offer coursework and programs that specifically benefit real estate investors, a degree is not necessarily a prerequisite to profitable investing. Here are a few characteristics that successful investors have in common.
1. Planning ahead.
Real estate investors must approach their activities as a business in order to establish and achieve short- and long-term goals. A business plan also allows investors to visualize the big picture, which helps maintain focus on the goals rather than on any minor setbacks. Real estate investing can be complicated and demanding, and a solid plan can keep investors organized and on task.
2. Knowing the market.
Effective investors acquire an in-depth knowledge of their selected market. Keeping abreast of current trends, including any changes in consumer spending habits, mortgage rates and the unemployment rate, to name a few, enables real estate investors to acknowledge current conditions, and plan for the future. This enables investors to predict when trends may change, creating potential opportunities for the prepared investor.
3. Developing a niche.
It is important for investors to develop a focus in order to gain the depth of knowledge essential to becoming successful. Taking the time to develop this level of understanding is integral to the long-term success of the investor. Once a particular market is mastered, the investor can move on to additional areas using the same in-depth approach.
4. Abiding to a code of ethics.
Real estate investors are usually not obligated to uphold a particular degree of ethics. Although it would be easy to take advantage of this situation, most successful investors maintain high ethical standards. Since investing in real estate involves people, an investor’s reputation is likely to be far-reaching. Effective investors know it is better to be fair, rather than seeing what they can get away with.
5. Encouraging referrals.
Referrals generate a sizable portion of a real estate investor’s business, so it is critical that investors treat others with respect. This includes business partners, associates, clients, renters and anyone with whom the investor has a business relationship. Effective investors pay attention to detail, listen and respond to complaints and concerns, and represent their business in a positive and professional manner.
6. Staying educated.
As with any business, it is imperative to stay up to date with the laws, regulations, terminology and trends that form the basis of the real estate investor’s business. Investors who fall behind risk not only losing momentum in their businesses, but also legal ramifications if laws are ignored or broken. Successful investors stay educated and adapt to any regulatory changes or economic trends.
7. Protecting your assets.
Taxes comprise a significant portion of an investor’s yearly expense. Understanding current tax laws can be complicated and take time away from the business at hand. Sharp investors retain the services of a qualified, reputable accountant to handle the business logs. The costs associated with the accountant can be negligible when compared to the savings a professional can bring to the business.
8. Building a network.
A network can provide important support and create opportunities for a new or experienced real estate investor. This group should comprise of a well-chosen mentor, business partners, clients, or members of a non-profit organization, allowing investors to challenge and support one another. Because much of real estate investing relies on experiential based learning, savvy investors understand the importance of building a network.
Despite abundant promotions claiming that investing in real estate is an easy way to wealth, it is in fact a challenging business requiring expertise, planning and focus. In addition, because the business revolves around people, investors benefit in the long run by operating with integrity and by showing respect to associates and clients. Though it may be relatively simple to enjoy short-lived profits, developing a long-term investing business requires skill, effort, and these 8 important habits.
Hi I am Abishek Kumar, blog writer by profession with commonfloor.com. CommonFloor is India’s leading online real estate platform that combines property search, apartment management and vendor management, thereby catering to consumers’ complete residential needs. I provide tips and suggestions on property investment, real estate basics, and community living. For more property related queries, you can visit http://www.commonfloor.com