No matter where you’re from and who you are — we all have one thing in common. We all have dreams and aspirations! And, for many, real estate investing is a very real way to live comfortably and to transform dreams into a reality.
But, real estate investing isn’t an easy path. That’s exactly why we’re here to help! Real estate investing doesn’t come with a map, but here are the top 9 tips to make your journey a bit clearer (and a bit easier)!
Reach for the stars, keep these tips in mind, and you’ll be at your dreams in no time.
1. Understand Your End Goal
Where do you picture your real estate investing journey taking you? Taking the time to think this question through and answering it will be of great value to you. By understanding your end goal, you will then be able to construct a strategy that is clear and concise. There are so many facets to real estate investing, which causes many new real estate investors to get sidetracked easily.
Understand your end goal so that you can create an educated strategy to achieve that goal.
2. The Power of Proactive Maintenance
Imagine this: The sun’s out and the weather’s so beautiful. You’re having a perfect day.
Then suddenly, you get a call from one of your tenants — the entire living room roof has collapsed! Your day is ruined and you will now need to spend thousands fixing up your angry tenant’s living room.
Want to avoid this situation? Nip maintenance issues in the bud before they grow out of control. To do this, keep your door open and make tenants feel comfortable letting you know about any repairs that might need to be done. Whether through tenant portals, phone calls, or emails, try to check up on tenants at least once a week.
When looking at repair suggestions, pay special attention to water damage as that can lead to catastrophic problems.
3. Understand the Market
Taking time to understand the current and future real estate markets are some of the best investments you can make. Taking the time to understand the market will always be valuable to you, and you’ll be able to advance faster if you do. Why? Well, fundamentals like supply and demand will help you determine when and where to purchase rentals for the best results. With knowledge of the real estate market, you mitigate risks and are able to act before your competitors.
Understanding the market will become more and more essential as your career advances. Rather than cramming in the knowledge, learn slowly but steadily until you know the market inside and out.
4. Diversify Your Investments
Want to reduce real estate risks while getting better opportunities? The only way for this scenario to happen is if you diversify your investments. By having investments in all different places and niches, you are able to manage risk and reduce the volatility of an asset’s price movements. As a general rule of thumb, less diversification will result in more risk.
Further, if you establish investments in all different places, you make your name known. With your name buzzing around the industry, you end up with more opportunities than before.
5. As You Progress, Stop Doing Everything
As a real estate investing beginner, being a jack-of-all-trades is okay. Most beginners will often only have a single rental to take care of — allowing them to perform both menial and administrative tasks without too much stress. However, as your portfolio grows, you may need to outsource work to third parties.
Outsourcing will cost money, but it will allow you to focus on new real estate investing endeavors while ensuring that your older tenants are taken care of. To keep your budget on track, add the property management expenses onto the rentals you are considering.
6. Treat Your Investments Like A Business
Real estate investing isn’t your typical business, but it’s a business nonetheless. As a business, there are certain rules that you must follow in order to excel. Be professional, follow the law, and have good management on all levels of your organization.
Real estate isn’t closing several individual deals, but rather, you are expanding your business with each deal you make.
7. Always Have A Plan B
New real estate investors often have an overly glamorous idea of the real estate world, and as a result, invest too much into their initial plans. Once a problem arises, the real estate investor may find it difficult to financially recover — causing their journey to halt or end prematurely.
It’s important to be prepared for unfavorable situations like unforeseen maintenance and tenants that suddenly bail out at the last minute. Only a few successful real estate investors were able to get to where they are with luck, most of them got there by being adaptive. Be realistic and reserve some cash in case you ever need to go resort to plan B.
8. Digital Tools Are Your Friends
Digital tools are available for every facet of real estate investing nowadays. From assessing the initial value of a property to marketing your investments, digital tools can make the process easier and seamless. I mean, software like SmartMove, can even screen tenants and ensure that you don’t end up with any troublemakers!
9. Join A Local Networking Group
Trust us, joining and interacting with a few local networking groups will make life so much easier! If you need to fill up your rentals, that momentous task will become easier when you know people in the industry. The same applies when you need to look for a contractor or buyer for one of your properties. Not only will networking get you more leads, but it gets you leads that are more likely to stick!
If you’re a new investor, the quickest and easiest way to strengthen your network is to join a local networking group. After all, there are thousands of interconnected real estate investing groups across the country.