Real estate has always been considered to be a solid investment.
While real estate investing is one of the most profitable ventures, with more than 80% of the richest people in America having acquired most of their wealth via real estate, there are certain principles you should grasp in order to become a successful investor and enjoy the profits you’ve always wanted.
Whether you’re just getting started with real estate investing or you’ve already done your first deal, you can always learn something new. These five principles will prepare you for every situation in real estate investing and help you achieve your goals.
Location is Key
This one is a no-brainer, but it’s important to bring it up nonetheless. Location is the most important factor when it comes to real estate investing. Never underestimate the importance of picking the right location when buying or selling property.
A good location causes demand, and demand brings a larger pool of tenants. Of course, good tenants pay their bills and bring you some extra cash.
Relationships play a critical role in real estate investment. People are your number one resource, and knowing more people will help you find nice properties to buy or customers for your properties. Get to know people by their names, and write down what you discuss for future reference.
Interact with the right individuals, including real estate agents who have many listings of your favorite properties. If you don’t find a real estate agent, don’t worry. Just get out and meet new folks so you can start creating positive relationships.
Set Clear Goals
Establish clear, achievable goals, not simply wishes. For instance, you might want to check out a given number of properties every week. Or perhaps you aim to write a specific number of offers per month. Or you might want to prepare one or more properties for rent every two months.
Set definite goals for all steps of the process, including checking out online listings two times a week, making five phone calls every week, and so on.
Action builds momentum and frequent action creates habits. Positive habits that will bring you success in real estate investing.
To help you achieve your goals, read about Kheng Ly to find out how he became a successful real estate investor and developer.
Improve your communication skills, develop your negotiating skills, and learn how to be persuasive. Acquiring these skills can be very useful when you’re setting lease terms and rents with tenants, haggling the cost of a property, negotiating mortgage costs with your bank, etc.
Strategy is very important when it comes to real estate investing. Make sure you’ve got a business plan as well as set clear, achievable goals for the process. Most importantly, conduct investment property analysis and real estate market analysis before you close a deal with any seller. Never invest in any property without your figures adding up.
This includes, but not limited to, working out key financial metrics, understanding cap rates, cash on cash return, and estimating the net return on investment. And factor in mortgage payments, carrying and current costs, depreciation, interest costs, etc.
Real estate investing gives the promise of amazing returns. But it has also made some people bankrupt, so make sure you know what it involves before you get started. And as long as you apply these principles well, you’ll eventually reap big profits from your real estate investments.