Many people are aware that investing in real estate can be extremely lucrative. In fact, many Americans built financial empires by investing in real estate. To highlight just how significant the impact has been, Andrew Carnegie, the business tycoon, famously said: “90 percent of all millionaires become so through owning real estate.” That is a fairly bold statement to make but is true for many people. For anyone looking to create or scale your real estate business, these are some habits of some of the most successful and profitable property investors.
A successful property investor knows to always treat real estate investments like a business. Therefore a good business plan is essential. Some aspects of a business plan include a compilation of short and long-term goals, a spreadsheet illustrating the proposed budget per property, a timeline showing the completion of goals, as well as profit expectations. Having a strategy outlined on paper helps an investor stay organized, on track, and adaptable should any unexpected events occur.
As with any investment, there come risks. Potential real estate investment risks include property value decline, interest rate increases, tenant damages, natural disasters, fire damage, difficulties finding good tenants, etc. Educate yourself on the risks involved, so you can strategize appropriately and have a plan that can mitigate those risks as much as possible.
Networking within the real estate industry helps build valuable relationships. While networking with other property investors, property managers, clients, contractors, and the like, it’s important to represent yourself professionally and build a positive and respectful reputation. By being honest about your goals and business objectives, you can meet other professionals who can help. For instance:
Mastering the real estate market in its entirety is overwhelming and challenging. It’s best to start with a niche and stick with it until you are ready to expand into other areas as you see fit. Some investors start out by flipping homes. Others purchase properties and rent them out as a source of passive income.
To operate in the black, an investor must stay on top of the current industry and market trends, changes in tax treatment, amendments to state laws, spending habits among consumers, and the general economic state of the country. Staying abreast of these topics not only makes you competitive, but it also gives you the edge up on making intelligent calls on potential investments.
Many successful business owners have gained success because they had a mentor to help them navigate their particular field. Mentors can teach invaluable lessons and can be supportive and guide you through difficult investment decisions.
Spending money to renovate, improve, or upgrade your property, can help attract the right kind of tenant and increase your revenue stream. You don’t have to spend a lot of money on renovations to improve the rentability of your property. Simple improvements and thoughtful touches go a long way in the eyes of a tenant.
Earlier, we discussed the risks involved in real estate investing. Because of these risks, it’s wise to check on your property (or properties) often. Performing a quick assessment can provide reassurance that everything is in working order. If your busy schedule does not allow for these kinds of visits, especially if you own multiple properties, consider teaming up with Blueground. If you become a Blueground client, we handle all the maintenance, cleaning, and management services of your property. We also guarantee that your property stays in immaculate condition.
Running a business, especially a real estate business, consumes a lot of time and energy. Those who are successful in their business, typically focus their energy on business matters. They often leave the technical complexities involved in bookkeeping and filing tax returns to a capable and qualified CPA.
As an entrepreneur and business owner, staying driven, and hyper-focused on your goals can contribute to your overall growth. Some ways to continually grow include the following examples:
Not everyone has been successful as a property investor. The job is not an easy one. It takes a lot of time, dedication, and preparation. If you have the drive, the vision, and incorporate all of the habits covered in this article, your career as a property investor can be long and prosperous. After putting these habits to work, you may see the size of your business grow. When that happens, you may consider partnering with Blueground. We take care of furnishing your property, we find and screen potential tenants, ensure rent is paid on time, and take care of all the paperwork involved in the renting process.