Posted on May 4, 2016
Strategies Are Necessary for Successful Real Estate Investment
There are multiple ways an individual can be involved in real estate investment, which is likely the greatest things about real estate investment. However, no matter how you choose to be involved, you need to develop a strategy.
The industry is a broad one, welcoming those interested in long-term rentals, short-term strategies, the flipping of properties, or buying of notes or tax liens. No matter what you’re interested in, there’s a strategy. Also, there’s a number of things to be considered when becoming involved in the real estate investment.
Strategies should be designed for specific endeavors, and strategies by nature should focus on end-to-end profits. In developing strategies, there are monumental mistakes that full-time real estate investors make, which can are troublesome for these real estate professionals.
It’s imperative that real estate professionals plan ahead. Many choose to plan as they go, which is a mistake. Failing to plan ahead is one of the biggest mistakes that an investor can make. In fact, it can be akin to working backward if you find a property to invest in and THEN develop a plan. Select an investment model and property that coincides, so that your transaction will make as much sense to you ten years from now as it does today. Real estate investment is an investment strategy, not a real estate transaction.
By doing your due diligence, you will ensure that you won’t spend too much money when investing in properties, and you educate yourself on the business in a way that helps secure the financial futures of you and your family. Don’t move too quickly. Take your time to make deals so you don’t make a reckless decision that will leave you without personal savings. Budget for everything, whether that’s a property manager, a handy manager, property taxes, insurance, vacancies, or mortgages.
Unfortunately, you won’t make money overnight. The real estate game is one that requires a committed level-headed player who understands that this is a long-term investment.
Develop Strong Relationships
Rather than going at it alone, consider choosing a team of professionals who will ease the selection and maintenance process.
Develop a strong relationship with dependable real estate agents, home inspectors, closing attorneys, lenders, and appraisers, who will be instrumental for ongoing or future deals. Likewise, find professionals who will be able to assist when it comes to heating or air conditioning, roofing, plumbing, contracting, flooring, and all-around maintenance.
Design an Exit Strategy
Rather than being cornered into keeping a faulty property after buying it, construct a viable contingency plan. Consider options beyond simply selling or renting. For instance, you can offer a lease-purchase to a buyer or a wholesale option (selling to another investor at below-market cost), which will make it a bit easier to shed the property in a way that’s still profitable, even if you this means having to pay carrying costs.