Real Estate Investing and the Skills Needed to Succeed
Have you ever thought of investing in real estate, but don’t know how and where to begin? Fair enough -- real estate investing, to beginners, can sound like rocket science. But truth be told, anyone can invest in real estate whether you have only a little or a lot of knowledge on this subject! In fact, even if you don’t have a degree or you’re just an ordinary person, you can still do real estate investing and even benefit from it throughout the years.
What’s more is that there are also various resources you can make use of to understand and learn about how this real estate investment can be feasible. HERE, we list down some tips and skills needed for you to succeed when investing:
1. Knowing THE Figures
The most important calculation that you should prioritize is positive cash flow, which basically means that income should always be more than expenses. You don’t need to be a Math genius on this; what matters is that you should understand all the expenses that might come up if you invest in a property. These include fees for insurance, maintenance, mortgages, property tax, vacancies, etc.
You can also utilize tools like investment property calculators and Microsoft Excel spreadsheets for calculations, so you can save a lot of time and effort.
2. Understanding Market Conditions and Trends
When it comes to real estate, you need to understand the market where you are planning to invest -- when is the right time to buy or sell, the areas that are in high demand, the neighbourhood, job market, rental rates, mortgage and property prices, the costs of repair ad renovation, and even the ways of transportation.
Aside from that, it’s also crucial to learn the potential risks associated with your business, such as getting bad tenants, or having trouble making payments, maintaining the property and collecting rents, for you to be able to adjust, decide, and manage your investment more easily.
Lastly, being familiar with specific markets can also allow you to predict when trends are going to change, creating potentially beneficial opportunities for the prepared investor.
3. Communicating and Building a Network
In connection with the above point, another thing that can help you manage your investment properly is to build a network of different team members whom you can consult prior to making huge decisions. Whether in the field of banking or renovation, keep in mind that your team should also be capable of assisting you in acquiring new opportunities and knowledge.
Furthermore, knowing how to properly communicate with them as well as your tenants is also a must in order to gain trust and respect. Besides, this skill can be reliable in terms of negotiating closing costs or hiring labor. This doesn’t mean you need to be “friendly” with them though. Learn how to be firm when necessary, and more importantly, to also understand their behaviour and demands.
4. Becoming More Business-Minded
One technique that a lot of real estate investors practice is treating their investment and other real estate activities as a business. With this in mind, establishing and achieving short- and long-term goals, identifying objectives and plan of actions, as well as developing and keeping a focus would be a lot easier.
5. Learning the Business/Investment Continuously
As mentioned earlier, investing is like rocket science. There’s so much more about it that an investor must continuously learn even long after the investment has been made. Hence, you need to keep updated on the terminology, and laws and regulations in the real estate industry.
Other than that, it’s also important to learn everything about a specific type of investment. Regardless whether it is wholesaling or commercial real estate, if you are confident in this area, you will definitely be a successful long-term investor!
6. Seeking Help If Necessary
Rather than risk time, effort and money solving a difficult problem on their own, successful real estate investors know it is worth the additional costs (in terms of money and ego) to find help when they need it and embrace other people’s expertise -- a mentor, lawyer, accountant or supportive friend. If necessary, you may even invest in a reputable accountant to handle your business’ books. Remember, taxes can be very, very exhausting, as it make up a large percentage of a real estate investor’s yearly expenses.
We want you you to experience the Reval Beyond Compare™ difference. As an incentive we will be waiving the sales commission for the first person to List and Sell with Reval.
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