8 Habits That Help Build Successful Real Estate InvestorsNov 07, 2023
Undertaking a journey into the world of real estate investing may seem daunting, at first glance. Between market research, property management, closing fees, financing, price negotiations; there are many sequences that collectively result in a successful real estate transaction.
While you may feel like you need an advanced degree to become a successful investor, the truth is that success is far more practical than it appears. In fact, some of the most successful real estate investors are those who transitioned from their chosen careers and made a bundle in the world of real estate.
Truly successful investors share a number of habits and characteristics that help them rise above the rest of the crowd. Here is a summation of 10 successful real estate investment habits practiced by triumphant investors each and every day.
Successful investors always have a plan
Effective real estate investing is like growing a business. It requires hard work, patience, and a plan to achieve both short-term and long-term growth objectives.
Just like a business plan shepherds the growth of a business, an investment plan helps you make smart prosperous decisions with real estate. A solid real estate investment plan should include calculations for:
- Inbound cash flow from rental units
- Property management expense projections
- Number of units to own in a multifamily dwelling
- Refurbishing costs and timelines to complete the work
- Projected changes to local demographics
- Calculate expenses for potential future risks or losses
These are some of the examples to include in your investment plan. In general, try to incorporate anything that could impact the value of your investment over time.
Effective investors know their markets
You’ve likely heard the old adage that “knowledge is power.” In real estate, knowledge is indeed power. Knowledge is what allows you, as an investor, to make your investment plan, and then adapt the plan as new conditions arise.
Learn about your local market, including demographic data, population growth, new housing starts, and other important information. Additionally, look into public transit and any investment opportunities positioned near those transit routes.
Property located near public transit is typically valued at higher prices than similar buildings not positioned along transit routes. Transportation routes are just one of many examples of factors that draw people to live in a particular area. Do your research and find out what renters want in this market and in this day in age. How many of these checkboxes does the property align with? Use this knowledge to help refine your investment decisions.
They build up their personal reputations
Part of what makes a real estate investor a successful applicant of their trade is that they understand other people are key to their success. Buildings and financing are how you build up your empire, but other people are the secret to closing those deals.
An honest investor creates a personal reputation built around ethics, accountability, and transparency. Other people are attracted to that honesty, a recognition that you abide by high ethical standards. They understand that you’ll negotiate fair prices and maintain quality properties to help your tenants maintain a high standard of living.
When you have a positive reputation as an investor, you’ll also build healthy relationships with other investors. These relationships can introduce you to new investment opportunities that can develop into lucrative money-making returns.
They create a personal investment niche
Consider investing using this philosophy: you can be effective at multiple aspects of the business, or you can be a master of one or two core areas. Which approach do you think is more likely to breed the greatest results?
Successful investors take time to learn as many trade secrets about a particular niche of the real estate industry. Remember, knowledge is power, and mastering one core area of the industry empowers you to create profitable ventures in the real estate space.
Once you’ve mastered your particular niche, you can branch out into other areas and create new investments that yield capital growth. Become a real estate investment master and build the foundation for life-changing generational wealth.
Profitable investors need referrals
Once you’ve built a credible reputation as an investor, you’ll cultivate rewarding relationships with other experts in the industry. These relationships are the source of valuable referrals that can help bolster your own business to new heights.
Regardless of whether relationships involve partners, associates, clients, tenants, or anyone who can impact your real estate business; make sure you always maintain positive uplifting relationships with the people in your life. If people enjoy your interactions, and they can trust you as an investor driven by personal honour, they’ll feel comfortable referring new leads your way.
Successful investors love continuous learning
The adage of “knowledge is power” is a common saying for good reason. There are always opportunities to learn new information, develop new skills, and apply perceptions to increase your level of wisdom.
An effective investor lives for education, and they spend copious amounts of time acquiring as much knowledge as possible. As you build your own real estate empire, don’t limit yourself to just mastering abstract concepts about investing. Focus on learning other trade secrets, including knowledge about things like:
- Technology used to source or close deals
- Regulations and by-laws impacting property values
- Legal ramifications of different tiers of investments
- Landlord and tenant rights upon existing properties
When you commit your own time and energy towards self-education, you’ll build the tools you need to develop a lucrative real estate business. As time goes on and your business expands into a thriving empire, you can create the pillars for life-changing generational wealth.
Winning investors know how to protect their interests
Successful investors recognize that growing a real estate empire requires protection from both internal and external threats to that empire. The most effective protection is legal protection from the implications of acquiring investments, managing properties, and engaging with tenants or other investors.
Maintain ongoing legal protection by hiring a personal attorney to oversee the legal implications of all your business dealings. You can also retain the services of a law firm on an as-needed basis, particularly during the due diligence and closing phase of a new real estate deal.
Successful investors employ financial managers
Legal protection is not the only administrative need as you grow your real estate empire. You also need support from a diligent financial manager who can oversee all your financial needs.
As you grow your business, your financial statements must expand accordingly to more accurately reflect your holdings. Your real estate empire will be represented in the form of:
- Personal cash-on-hand
- Accounts receivables
- Number of owned properties
- Accounts payables
- Late or outstanding rental payments
- Administrative expenses
- Legal expenses
To dedicate more of your own time towards building and managing your real estate business, hire a proven financial manager to oversee the financial statements. Your business will remain financially sound without requiring arduous hours of your own time to personally manage the capital. Instead, delegate this work to your financial manager so you can focus more time doing what you love — building up your real estate business.
BONUS TIP: successful investors don’t work alone
Finally, there’s another old saying that you should take heed of as you begin building your real estate business. That saying is “faster alone, further together.”
If you think about the implications of that saying, you can do a lot of work yourself and, theoretically, get things done much faster. However, in a rush to get things done on accelerated timeframes, you may overlook crucial details — such as the legal implications of growing your business — details that wouldn’t get missed with additional help.
Added help goes beyond the need of retaining good legal counsel or a capable financial manager. Sometimes, the best way to ensure nothing is overlooked as you acquire new properties is to bounce ideas off other investors who share your passion for creating wealth through real estate.
That’s why it’s in your best interests to join one of the fastest growing real estate investment communities. As a member of the ultimate real estate education platform, you’ll gain access to:
- Experienced investors who will coach and mentor you to grow your own business
- A network of like-minded individuals undertaking the same investment journey
- Educational modules that teach you how to establish financial independence
- Passionate cheerleaders who all want to see you thrive into a successful investor
Don’t miss out on transforming your investment business. Join the ultimate real estate education platform to create a winning investment mindset, acquire useful real estate knowledge, and take appropriate action to build a thriving investment business!
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