8 Ways to Be a Better Real Estate Investor
Real estate can be a very lucrative investment. Whether you are looking to buy and manage one property or dozens, there are certain strategies you will want to implement in order to be as successful a real estate investor as possible.
Here are 8 habits of successful real estate investors, according to PropertyLark:
1. Having a Plan
You cannot go into real estate investing without a solid plan. You want to establish your short-term and long-term goals. You want to have a budget and a target return on investment (ROI) if you are a fix and flip buyer or a target cap rate if you are a buy and hold investor. Do your homework and develop a strong business plan to make your real estate investments as profitable as possible.
2. Researching the Market
Though real estate as a whole is generally a sound investment, every market is different. You will want to do your research on any market you are thinking about investing in, and then stay on top of market trends. This includes mortgage rates, house values, rent prices, local demographics and more.
3. Consulting with Other Investors
Having a good referral network is crucial to being a successful real estate investor. You can share leads with one another, discuss strategies and lean on the experience of others. You will all experience ups and downs, failures and successes. Don’t be afraid to ask for advice and work with other investors who can help you achieve more.
4. Understanding Your Risks
No investment is ever a “sure thing,” and that’s certainly true with real estate. You have to be willing to assume some risks in order to earn your rewards. A successful investor will be able to mitigate his or her risks by avoiding common pitfalls and mistakes.
5. Joining a Real Estate Network
Consider becoming part of a real estate investment network like PropertyLark. We can provide custom, detailed analytics on any property available and get you additional resources that will help you along your investment journey.
6. Building Your Business
No matter how many properties you intend to buy, real estate investment is a business. You will want to make sure and have the proper legal structure for your business to improve your tax benefits and protect your personal assets in case of legal issues. In general, if you treat your real estate investments as a business, you will get so much more out of everything you do.
7. Working with Professional Advisors
Having an experienced financial advisor, tax advisor or accountant in your corner will be extremely beneficial as you put together your investment plan and manage your properties. Don’t be afraid to seek professional help that will make your business more successful.
8. Being Realistic
There is no magic pill that will make you a successful real estate investor. It takes time. It costs money. It’s a lot of hard work. Be realistic in your expectations do what you need to do as you build up your real estate business. Being realistic also applies to your analytics process. When planning your budget or analyzing a property, you have to use conservative projections. Budget for the renovations to take longer and cost more than you expect. Plan for the house to sell at the lowest possible resale price or for your rent to be on the lower end of the scale. This builds cushion in your budget and protects you if things don’t go exactly as planned (they rarely do).
These are just a few tips to consider if you want to be a successful real estate investor. If you are interested in joining the PropertyLark home buying network, fill out our contact form and the brief buyer’s questionnaire to see if you qualify.