Real estate investing is a process.
You don’t just wake up one day and suddenly become successful in real estate investing. It just doesn’t happen. There are steps you have to take, routes you have to plan, goals you have to set. Real estate investing requires education, research, and dedication. It is a long, drawn-out process, which still requires some trial and error moments long after you get started.
Of course, it isn’t just because real estate investing is complicated. Everything takes the same steps, albeit in varying degrees. You don’t learn to walk overnight. Riding a bicycle takes hard work and practice. Learning a career takes years of dedication, education, and devotion.
Real estate is no different.
So, what steps do you have to take to as a new investor?
Here’s the deal:
Know your market
Real estate markets are essentially little niches. They each have their own features, influencers, and demographics. While some areas may be similar in some regards, you will find that overall, the differences can be startling. As a real estate investor, it is vital to ensure you have a handle on the nuances that shape your market.
The importance of understanding the market you wish to invest in cannot be stressed enough. Being intimately familiar with the area, as well as having a basic understanding of the national market, will help you to make smart decisions and avoid overpaying or purchasing a property that isn’t a great portfolio addition.
While you may think that real estate investing is a relatively isolated practice, that thought couldn’t be further from the truth. While you may be the only investor (which isn’t always the case), networking with others in the industry is crucial and a major key to the success of your venture.
Prior to laying out any money, begin by attending real estate conferences and local meetings. Utilize social media outlets, webinars, blogs, and forums to connect with other investors, lenders, real estate agents, and contractors.
Networking is a double-edged sword of goodness for real estate investors. It gives you new opportunities to learn from those with experience and those experiencing it right now. Networking also helps to put you in a prime position to learn about deals as they hit the market, as well as giving you an association of individuals who may be interested in your own sales if you find yourself attempting to sell a property.
Solid networks also help when you are looking for contractors, tenants, or services.
While it can be tempting to jump right into real estate investing, it is important to take a few steps back and do some basic calculations. Run the numbers yourself. What can you budget? Do you have a down payment? Do you have an emergency fund for it the property will need repairs? How much do you need to make per month from the property to be able to pay the property’s bills as well as having a surplus for repairs and maintenance and a little extra to make a profit? What is the going market rate for rental prices?
Planning and budgeting should always be your primary goal when real estate investing. You need to have an idea of what you can spend and when before going through with any deal. Understanding these budgets and plans will allow you to quickly decide whether a property is a viable investment for you and your needs.
It has been said before, it will be said again—real estate investing requires an impressive array of patience. Despite what television shows may have you believe, it is not a get-rich-quick scheme. It is a long, arduous process filled with many bumps and trivialities along the way. Everything takes time—whether it be learning the market, doing the research, or simply finding the right property. Learning patience, and continuing to develop that trait, is the only sure way to be successful in real estate.
Always remember that real estate will take you some time to get the hang of. Don’t get stressed out or put off. You will get there, it just takes patience.
The fifth step you need to take when starting out as a new investor in the real estate industry is pretty obvious—take action! It sounds simple enough, but surprisingly, this is where a lot of new investors get stuck.
Once you’ve done your research, then learned your market, and patiently waited for the right deal—it is time to make the leap. Don’t get frozen from fear of making a poor decision. Trust yourself and your new skills. If you’ve done your due diligence and the property checks out, jump on it!
No matter who you are, learning the real estate investment industry is a process. It won’t be something you just pick up overnight and thinking it will be will only end in disheartened emotions. But, if you are realistic about your timeline and follow these five steps, you will find yourself well on the way to a successful venture in the real estate investment industry.
DISCLAIMER: This article expresses my own ideas and opinions. Any information I have shared are from sources that I believe to be reliable and accurate. I did not receive any financial compensation in writing this post, nor do I own any shares in any company I’ve mentioned. I encourage any reader to do their own diligent research first before making any investment decisions.
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