Investing is a gateway to financial independence. It is quite difficult to become rich by being an employee or have a typical business enterprise. Standard investment options range from stocks to invest in startups. But one of the favorite investment instruments for the finance maestros is real estate investment.
Like every other investment virtue, it is essential to know the game inside out. Investing in real estate offers the possibility of getter abundant quicker than other conventional investment options. It is one of the best passive income sources. Passive income is the income that doesn’t need your effort or attention to grow over time. In Real Estate Investments, correct spotting of property and money invested in it works for you to get rich.
Finance Gurus don’t get tired talking about real estate investment wonders. Real Estate Investments make a return in two ways, firstly as rental income on the property you own, and secondly as capital gains when resold after some time. However, it sounds simple, but it is not easy to buy any real estate and wait for the dollars raining. Real Estate Investments have a lot of challenges and pitfalls to face, and it is not a suitable option for risk-averse investors, as they offer higher returns. Still, there are possibilities of higher losses too. It involves understanding the current real estate market, identifying the right properties to invest, scout for the deals, understanding laws and regulations like 1031 Exchange for own benefit, timely decision making of buying or selling, etc. It takes more than just capital investment to be a wise, competent, and successful real estate investor.
Let’s explore some the aptitudes and traits one must possess to be a seasoned real estate investor:
1. Calculated Risk Takers
Real Estate Investment is not a cup of tea for risk-averse people. It involves investing substantial amounts, and it takes time to materialize the gains in the fluctuating market. Many aspects need to be understood and inherent risks that need consideration first. However, those who also take risks on their whim can also suffer from this attitude. Seasoned investors always adopt a balanced approach of calculated risk-taking. They work out the numbers of their proposed deal and make decisions accordingly.
2. Imaginative And Optimistic
Having a creative and imaginative sense of real estate can bring more significant returns on investment than the usual. Seasoned investors have an eye of looking at the gold under the pile of dirt. They can imagine a high return property under a distressed property. They can come up with ideas that can enhance the selling value of the properties. This approach can include adding one more bathroom, adding more lounge space by cutting the lawn area, changing the standard color into cozy outlooks, etc. Successful Real Estate Investors apply their imagination and stay optimistic about it while others consider them crazy or maniacs.
3. Focused
Just like in any other aspect of life or profession, their focus is on the top traits of successful real estate investors. They can keep their minds and concentration from useless or meaningless matters and center where it matters. Consider it as an example of the Pareto Principle “The80-20 Rule”. They focus only on the issues which provide 80% of the results, like scouting of best locations, low-cost investments, etc. In contrast, lesser essential issues like tax matters, overhauling of property, legal formalities are delegated to their associates or employees.
4. Relationship Building And Networking
We all have heard this phrase, “it’s not what you know, but who you know.” Real Estate Investors embrace it and follow it religiously. One of the reasons why the rich get even richer because they know and have connections with the right people. These relationships enable them to get the best deals before everyone, getting their permit approvals from the authorities, getting the best construction prices, etc.
Successful Investors spend ample time in creating and maintaining powerful connections as it lay out the foundation of multiplying their wealth. Similarly, they also work on their networking skillsets by attending high net-worth events to spread their network.
5. Constant Learners
Almost all successful Real Estate Investors have this common trait that they all are avid learners. They are eager to know relevant updates or developments in the local laws, council authority guidelines, financial implications, etc. Similarly, they spent time in attending workshops or reading books that can enhance their knowledge in the craft of investing.
Keep Your Real Estate Investment Goals Grounded In Reality
In addition to all the aspects discussed, rarely any real estate investor wins the investment game every time. It takes some failures, hit-miss, and trial and error to master the game. Therefore, it is essential to stick to the basics, keep learning about the trends, keep looking for opportunities, and stay longer in the market to win the race; you have to be in the run.
