The real estate industry is filled with a lot of people trying to make it; if you want to stand out and reap the benefits of the industry, then you need some real estate investing principles.
There are real estate investing “tricks” and techniques that you may know or want to know. These are new ways of doing things that are worth learning. Knowing about the latest types of financing can also help you find the right place to get money to invest.
But first, you need to learn some real estate investing principles. Here are six of them.
1. Build relationships
Real estate investing is about relationships. People are your most valuable resource, and the more of them you know, the more likely you are to find good properties to buy or buyers for your properties. Ask people for their names, and if your memory is poor, take notes. Know the right people too, including a real estate agent who gets many listings of the type you are interested in. Using a multiple listings website (MLS) like Brent Housing also helps you to explore a lot of options.
2. Understand the numbers
Know and understand the relevant numbers. When you look at a rental property, for example, you should be thinking about the income, the expenses, and the capitalization rate, or “cap rate.” Imagine how certain changes would allow you to raise the income, and what that would do to the value. A “feeling” about a property, without understanding the numbers, gets many investors into trouble.
3. Reduce risk
Look for and use methods to reduce risk. Have inspection, financing, and other contingency clauses in the offer, so you’ll get your deposit back when a deal falls through. Consider your exit strategy before you buy, and have a “plan B.” Value real estate using comparables or cap rates, not “hunches.” Buy through a corporation or LLC.
4. Be prepared
Be prepared for real estate investing. Have business cards, pens, and paper on you at all times. You never know when you’ll see a property for sale, or hear about one. Sometimes, when you mention that you invest in real estate, sellers, buyers, and other investors suddenly appear with information, opinions, and sometimes even good deals. Be prepared.
5. Set goals
Create action-oriented goals, not just wishes. For example, require yourself to look at a certain number of properties at Brent Housing per week, and maybe even to write a certain number of offers each month. Set goals for all sorts of little steps, like making six phone calls per week, checking online listings twice per week, and so on. Action creates momentum. Repeated action creates habits, and good habits lead to more successful real estate investing.
6. Learn, and apply what you learn
Keep getting educated, and using that education. Learning more from books, magazines, and even online seminars or webinars is a great idea, as long as you spend as much time doing something as reading about it. Some of us let the interest and enjoyment of reading about investing get in the way of actually investing. Good information is crucial, but it should lead to good real estate investing.
Finding the right investment takes time and preparation. So get acquainted with the industry, learn the real estate investing principles, and apply them to see results. You can find viable property options at Brenthousing.com and locate the one that suits you perfectly.