10 Habits of Successful Real Estate Investors
Joint ventures, wholesaling, and property management are just a few of the ways investors can profit from real estate, but it takes some finesse to become successful in this industry. While certain universities and industry pros offer coursework specifically for real estate investors, a degree is not necessarily a prerequisite to profit in this business. But there are certain characteristics that top real estate investors commonly possess.
Here are the 10 habits that highly effective real estate investors have in common.
1. Make a Plan
Real estate investors must approach their real estate 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. Know the Market
Effective real estate investors acquire in-depth knowledge of their selected markets. Keeping abreast of current trends, including any changes in consumer spending habits, mortgage rates, and the unemployment rate, gives real estate investors the knowledge to plan for the future. This enables them to predict when trends may change, creating potential opportunities for the prepared investor. At REIR we focus on La Crosse county, but always studying other emerging markets.
3. Be Honest
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 real estate investors maintain high ethical standards. Since real estate investing involves people, an investor’s reputation is likely to be far-reaching. Effective real estate investors know it is better to be fair, rather than to see what they can get away with.
4. Develop 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 build this level of understanding of a specific area is integral to long-term success. Once a particular market is mastered, the investor can move on to additional areas using the same in-depth approach. At REIR we’ve focused on single-family homes, but studying the market shows a need for multi-family housing now too.
5. Encourage Referrals
Build the kind of reputation that makes others want to work with you. Referrals generate a sizable portion of a real estate investor’s business, so it is crucial that investors treat others with respect. Including business partners, clients, renters, and anyone with whom the investor has a business relationship. Effective real estate investors pay attention to detail, listen and respond to complaints and concerns, and represent their business in a positive and professional manner.
6. Stay Educated
Successful real estate investors stay educated and adapt to any regulatory changes or economic trends. 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.
7. Understand the Risks
Savvy real estate investors understand the risks—not only in terms of real estate deals but also the legal implications involved. This comes with experience and pros adjust their businesses to reduce those risks.
8. Invest in an Accountant
Taxes comprise a significant portion of a real estate investor’s yearly expenses. Understanding current tax laws can be complicated and take time away from the business at hand. Sharp real estate investors retain the services of a qualified, reputable accountant to handle the business’s books. The costs associated with the accountant can be negligible when compared to the savings a professional can bring to the business.
9. Find Help
Learning the real estate investing business is challenging for someone attempting to do things on their own. Effective real estate investors often attribute part of their success to others, whether it’s a mentor, lawyer, or supportive friend. Rather than risk time and money tackling a difficult problem alone, successful real estate investors know it is worth the additional costs (in terms of money and ego) to embrace other people’s expertise.
“Motivation is what gets you started. Habit is what keeps you going.”
- Jim Rohn
10. Build a Network
A network can provide important support and create opportunities for both new and experienced real estate investors. This type of group, comprised of a well-chosen mentor, business partners, clients, or members of a non-profit organization, allows investors to challenge and support one another. Because much of real estate investing relies on experiential learning, savvy real estate investors understand the importance of building a network.
REIR Can Help
At Real Estate Investment Results, we do the work for you! We already have a plan, we know our market, and the risks. We know the regulations and the trends! Despite abundant advertisements claiming that real estate investing is an easy way to wealth, it is, in fact, a challenging business requiring expertise, planning, and focus. We’d like the opportunity to earn your trust too, as you get to know us through this newsletter, our reputation, along with our proven track record. All of which are very important to us.
— Michelle Boehmke
Source: https://www.investopedia.com/investing/habits-of-successful-real-estate-investors/
