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Expert Tips for First-Time Real Estate Investors

With the right amount of work, research and knowledge, anyone can be a property investor. But that doesn’t mean there isn’t a high amount of risk involved and knowing how to navigate that risk can be a precise science. Developing this real estate education can take years of hard work, especially if you want to stand out in a highly competitive industry. 

We’re going to look at some of the key habits of successful real estate investors, so that these can become a key part of your journey as a property investor.

1. Establishing a plan

Real estate investing requires careful planning, and establishing both short and long-term goals. This can help you maintain focus and keep you on track in times when things don’t always go the way you imagined. Organisation is key to the success of any investor, with a plan focused on estimated outlays and inflows of cash from rentals, property number goals, planning refurbishments or upgrades, changing demographics and other factors that may influence your investment.

Establishing a clear plan is particularly valuable for long term real estate investing, as it can be easy to lose sight of your goals and strategies over time. 

2. Stay educated

While developing your education is important, it’s also crucial to keep that understanding and knowledge up-to-date with the latest terminology, regulations and laws, and trends and strategies within the industry.

Not staying on top of these factors means you risk falling behind the competition, who can utilise their updated knowledge to adapt their processes and strategies when investing in property. Not keeping up to date on the laws and regulations that exist for property investors means that there is the potential risk of unintentionally breaching these laws and regulations.

Constantly updating and working on your education is critical, and doesn’t necessarily stop just because you have a sophisticated understanding of property investing. 

3. Maintain an ethical standard

There is no specific obligation for real estate investors to maintain an ethical standard in their dealings. Despite this, many investors still maintain an ethical standard, as investing involves working with people. Fostering a good reputation in the community can serve an investor’s own interests and improve the standings of investors in general. 

4. Know the market 

Staying educated is important, as we’ve already established. It’s particularly important to acquire an in-depth knowledge of the real estate market across the nation.

Having a good understanding of current trends, including spending habits, unemployment, vacancy and mortgage rates, are just a few useful areas to focus on. Knowing the market allows investors to prepare for that next move, keep their plan up-to-date, adapt to changing conditions, and pull the trigger on a deal at a moment’s notice. 

5. Know the risks involved

While there is considerably less risk involved in real estate investing, when compared to the stock market, that doesn’t mean that property investing is completely risk-free. There are a range of inherent risks involved in real estate investing, with loss of finances a very real possibility.

Examples of these risks include rising interest rates, which means an increase in mortgage repayments, and vacancy rates, with extended periods of vacancy impacting the cash flow generated from your property.  But don’t let this discourage you from property investing.

Having a good understanding of these risks can only help mitigate the chance of loss, as you can develop strategies to avoid or decrease this risk. 

6. Develop relationships 

It’s important for investors to build relationships with the right people, such as other investors, real estate agents, and more. Knowing the right people, who in turn know you’re in the market, can grant you access to deals that aren’t made available to the public.

These are called ‘off-market deals’ and can be a great way for investors to get ahead of the competition. So having these relationships and a good reputation with these key people is critical.

7. Seek help when needed

No successful investor can say they made it entirely on their own. Navigating the industry can be incredibly tricky, and knowing who to trust can be just as daunting. But there is no shame in seeking help from the experts. In fact, many investors will put their success down to the lessons and experience passed on to them from those investors that have had both success and failures.

This is also a key part of developing your education and keeping up to date on what’s happening in the industry, as well as lead to potential relationships that can be of benefit. A great way to seek help is to sign on to an online property course. Doing so can provide access to a range of experienced investors who won’t just give advice, but will often work with you to develop a strategy that is tailored around your goals and resources. 

Seeking advice and assistance from a good accountant and mortgage broker are also critical. Accountants can help you navigate the complicated world of finance and taxes, helping you save time and money, and ensuring you’re following all the rules. Mortgage brokers can help negotiate with lenders on your behalf and get the best deal.

These are just some of the habits developed by property investors who’ve experienced success in the industry. While it may seem clear-cut and relatively simple on paper, actually going out and developing these habits can be difficult.

Many investors will need to start their journey while working full-time, with competing commitments that leave them time-poor. But by remaining persistent and developing these habits over time, you’ll start to find they become a natural part of your process.

And hopefully, you’ll start to generate passive income which alleviates some of that stress. Remember, property investing is a competitive industry, but one with a wide range of resources and help available!

PK Gupta
Published: 24 Mar 2023


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