10 Real Estate Investing Tips

Posted on 17. May, 2010 by in General

Real estate investing is not as easy as it sounds; it has a steep learning curve.  In order to be successful at it, you need to invest time and resources as well as desire, commitment and perseverance. Knowing some investing basics will help you succeed as a real estate investor.  Here are 10 valuable tips to help you on your way:

1. Think of real estate investing as a business: Try not to think of it as a hobby. Spend time and money on your professional image, your company branding and on attending various seminars to improve your knowledge of real estate investing.

2. Take time to develop a plan: As easy as it sounds, real estate investing has many pitfalls. In order to avoid them, take time to set up your business, and develop a plan of action you can work with. Create a basic business model for your real estate investing business that can be modified as your experience and success grows.

3. Check the numbers: Real estate investing is all about numbers. If it’s an income property then one number stands out, cash flow. Be sure that after every last expense and bill has been paid, you will have positive cash flow from day 1.

4. Invest safely: There is always risk involved in investing, but it’s a calculated risk and not gambling. You should not invest in property based on speculation. Invest in areas with strong economic fundamentals and you won’t go far wrong.

5. Time is valuable, use it wisely: It is very easy to become overwhelmed with the amount of work involved in real estate investing. Try to spend time on the part of the business that directly influences your profits. Accounting and marketing are extremely important elements, but networking and building up relationships will help expand your real estate portfolio.

6. Build a great team: It’s hard to find a successful investor who has ‘made it’ alone. Real estate investing is dependent on a strong, dedicated, skilled network of professionals. Spend time building up your essential team and use their expertise to your advantage. Without a great team, failure is a certainty.

7. Use your knowledge: Do your own research and trust your instincts. The key to being a successful real estate investor is learning how to grow your cash flow. You should be up to date on industry news and investing strategies. Your real estate education should be continuous. Follow other successful investors, join local investing networking groups to learn and share ideas and read trustworthy real estate investing industry sources. The more knowledge you acquire the more of an expert you will become.

8. Become an expert in one area: Decide what area of real estate investing you are interested in developing. Spend time and effort building an excellent reputation as an expert in this field. Don’t try to get involved in every real estate investing deal you can find, you will quickly burn out and costly mistakes are more likely.

9. Raise the income before selling: When the time comes to sell your investment properties, especially larger ones, new paint or cosmetic repairs are not going to seal the deal. Investors look at income more than the look of the property. Look for ways to raise the income on these properties and you increase the value to investors which relates to more profit for you at sale time. This can be done by raising rents and facilitating repairs that lower energy costs. More cash flow = more investors.

10. Always have an exit strategy: Avoid speculating on the future of the real estate market. Before you purchase any property you should have a clear plan and exit strategy in place. Have a backup plan in place incase the first course of action doesn’t work out. Know you market and plan before you begin to invest.

Finally, the biggest and most important tip is to take action and just do it!

To your investing success!

Richard & Jane Killeen-Payne
INVICTA Property Investments

May 2010

Tags: , , , , , , , , ,

Comments are closed.