7 Attributes of Successful Property Investors
Although the real estate industry provides a lot of opportunities to make profits, it can also be very risky, leading to huge losses for many. To be able to succeed as a property investor, these are the attributes you have to possess-:
a. Extensive Knowledge of the market-: You have to conduct an extensive and thorough research before investing in any area or property. First, you would want to know what the average costs of renting a property in an area is, the income and lifestyle of people in that area, their taste and buying preferences, zoning laws and other necessary information that would guide your investment.
b. Risk taker-: Property investment is not for faint hearted people. It is a very risky business that can be affected by a number of factors like the economy, taxes, natural disasters, etc. Therefore, you must be someone who knows how to properly manage risks.
c. Adequate planner-: Property investment is not a business to be rushed into. It’s quite different if you just want to construct a property or two to sell to people and earn profits. A property investor makes a living from real estate and anything that affects the real estate industry, affects his business. Therefore, a real estate investor must have a clearly detailed business plan on how he is going to invest and recoup all his investments and also, how he is going to manage his cash flow.
d. Understand tax implications-: A successful property investor must also analyze future tax consequences before investing in any property. You have to possess the knowledge and skills to help you reduce your taxes or at least have a financial advisor who would do that for you.
e. Diversification of Investments-: While we are not advising you to become a jack of all trades, it’s important to diversify your investments and spread your funds evenly to reduce the risks and guarantee steady cash flow.
f. Willing to learn-: The real estate industry is quite technical and to succeed, you must be willing to learn. Ensure that you have someone who is successful in the industry to act as your mentor and give you advice and guidance on how to succeed. You should also hire professionals to work with you. For instance, you would need a lawyer to handle all the legal aspects and an accountant for financial guidance and advice.
g. Networking-: It is also important for you to meet and communicate regularly with other property investors who may be able to give you some useful tips and inform you of current trends in the real estate industry.
To start a business as a property investor, here are the steps you should take-:
9 Proven Tips and Steps to Becoming a Property Investor
Step 1. Raise funds-: The real estate industry is really capital intensive which means that you would need a lot of money to invest. So it pays off to approach professionals who would give you an idea of what it would cost to build a property in your preferred location. You can also buy existing property for renovation and resale.
Step 2. Select a preferred location-: This is also very important. You should choose a location that is highly marketable and in hot demand. You can also go for areas that have good potential in the future. This would ensure that your investments and profits are recouped fast enough.
Step 3. Build your team-: Like I mentioned earlier, it is smarter to have professionals on your side to give you adequate advice. Get your team of lawyers, builders, accountants, engineers and all other experts you would need to work with you.
Step 4. Construction-: At the construction stage, you must take extra care in ensuring that your properties come with excellent features that would drive sales. For instance, in today’s real estate market, homes that come with alternative sources of energy and posh interiors are likely to go off the market faster than homes that do not have these features.
Step 5. Decide on a price-: After construction, you should decide on how much you want to sell or rent out your properties based on your expenses and profits you intend to make. You may also decide to rent-out instead and in this case, the rent that you would charge would be based on the average rent rates in the area.
Step 6. Contact brokers and Agents-: When you are ready to start renting or selling out your property, you would need brokers to help you do that. Brokers are the middlemen who would help you find suitable tenants for your home in exchange for commission.
Step 7. Hire a property manager-: It also pays to hire a professional property manager who would see to it that your rented properties are properly used and maintained. He would be in charge of responding to all complaints and fixing any faulty fixtures within the home. Sometimes, an agent would also act as a property manager.
Step 8. Start marketing your property-: In addition to the marketing that would be done by your agent, you may also need to engage in some advertising of your own so as to generate quick sales. You can advertise your property investment business in real estate magazines, on the internet or via your website.
Step 9. Insurance-: Lastly, you shouldn’t forget to insure your properties. Due to the risk involved in the real estate industry, it would be a wise step to reduce your risks by spreading it. Ensure that all your properties are duly insured against fire, flood and inflation or other factors that may affect your investments in future.
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