How to Succeed in Real Estate Investment
Climbing the ladder to the top of the real estate investment market might seem daunting, but if you take one step at a time, you’ll find that it’s not as impossible as it seems. By making yourself well informed and following a carefully thought-out plan, you can meet your goals.
Use these three steps as a general guide to success in real estate investment:
- Develop a system.
A checklist for evaluating a real estate investment can help you eliminate uncertainty. It will give you direction when you approach a real estate investment, an outline of the steps you need to take and what you need to look for in a property.
Start with the exterior of the property and work your way inside. Look for structural weaknesses in the foundation, roofing, siding, walkways and windows. You might want to take note of aesthetic flaws too, like overgrown landscaping or faded paint, although these will be easy to fix later.
On the inside of the home, focus on the issues that cost the most to repair or replace: the furnace, water heater, mold, plumbing and electrical. You can note eyesores as well, like ugly carpet or a bathroom that’s stuck in the 70s.
- Develop a niche.
There are many different types of properties you could invest in, and all of them require a slightly different approach. Rather than making yourself into a jack-of-all-trades, master-of-none, narrow your parameters to a small, niche market. Usually, this is based on geographical location, since the real estate market varies so much from place to place.
Once you master your niche, you might consider expanding to include another niche—but not before! You will profit more as an expert in one area than a peon in many areas.
- Build a network.
People have been working in the real estate market for as long as there has been a real estate market. There’s no need for you, as a new investor, to reinvent the wheel. By allying yourself with real estate veterans, you can make your search easier and learn some tricks of the trade along the way.
Work with a real estate agent to evaluate properties and a sales broker to get the best deal when you purchase the property. Attend open houses to see what features are attractive to buyers in your market. Join real estate investment clubs and seminars to get tips from old pros, too. You might even be able to pick up some leads from a wholesaler.
Don’t forget to network with people outside of the real estate industry as well. In order to make money on your property, you will need to find a buyer or tenant for it. Don’t consider marketing your property as a last step in the property of investment. Market all the way, and you will be able to start making money sooner.
Of course, these three steps are a broad roadmap to success in real estate investment. You will need to do more research to understand how to clear the mini-hurdles within each step. Just remember to keep the big picture in mind and your eyes on the prize.