What Habits and Practices Make a Successful Property Investor?
Real estate is not what could be called a “hands off” investment. Unlike stocks, bonds, cryptocurrency, or baseball cards, successful real estate investment requires know-how, organizational skills, and commitment to an action plan; you won’t always get away with putting down your money and playing the waiting game.
There’s no college degree or certification program that prepares you for all the ups, downs, and sideways movements you’ll encounter as a property investor, but you can learn from others who have made it work, and made a living in real estate. All successful real estate players, ranging from small scale investors to those with diverse and expansive portfolios, maintain common habits that help them thrive in the often uncertain, often tricky, and sometimes catastrophic world of real estate. If you want to make the most of your investments and grow your portfolio, you should internalize these beneficial habits.
Again, real estate isn’t “hands off.” You’re not buying a share of AMC — you’re beginning a professional journey. Before you even start, you need to plot your course. Developing a business plan will make it easier to not only achieve your goals, but realize them in the first place. Your real estate investment plan should cover every detail of your approach to owning and monetizing properties, including details about expected rental cash inflows, desired number of rental properties needed to meet your financial goals, your plans for property management, and so on.
2. Risk Mindfulness
There’s a commonly held belief that real estate is not only the safest investment, but that real estate investments are basically immune to loss. A professional, balanced real estate investor should understand that this is far from the truth. As with any investment field, real estate comes with real risk. Every decision you make, from purchasing new property to committing resources to the maintenance, management, and marketing of owned properties, should be made with awareness of the risk taken.
Unlike those in the medical profession, real estate professionals, including investors, are not required to uphold a formal ethical code. There is no Hippocratic Oath for real estate, even though there perhaps should be. Thankfully, reputation is everything in the interconnected, mostly localized, and highly social world of real estate.
More often than not, investors hold themselves to high personal standards, and are all the more successful for it. When others in the real estate field, especially those in your area, are impressed by your integrity, they’ll be eager to refer others to you.
4. Referring Others
Speaking of referrals, they’re probably one of the most helpful things you can receive, and they’re also one of the best ways you can help your peers. Get in the habit of referring clients and their associates elsewhere whenever they present you with a task or inquiry for which you aren’t equipped, but someone else is. That way, you’re keeping that business “in the family,” and next time someone you know is in the same situation, be it a fellow investor, property manager, or contractor, you’ll be one of the first to get that referral.
5. Recognizing Your Limits
The best real estate investors know they can’t go the whole journey alone, and they make a habit of calling in outside help before they strain themselves. It’s important to accept that you can’t be a lone wolf. Sometimes you lack the expertise for a given situation, and sometimes you’re still not knowledgeable enough about a subject to act like a master; be willing to accept outside help and to accept that you may still be a student in many ways. Hire an accountant when your numbers are getting to be too much to keep track of, or a dedicated, experienced property manager so you won’t feel overwhelmed keeping up with all of your holdings and all of your tenants.
It’s not worth it to be a jack-of-all-trades in the real estate business, at least not as an investor. Part of being an efficient, productive investor is being a purposeful one. Your investment focus should be zeroed in on the particular genre of property you are most comfortable with, most experienced in, and most knowledgeable about; that way, you’ll continue to build your expertise without spreading yourself thin. If you want to invest in commercial, focus on commercial. If you want to invest in a residential property, decide whether you should specialize in single family or multifamily housing before branching out. In every market, there’s a niche to be filled, and real estate is no different. Find your niche, and keep developing your skills within that niche.
An honest, realistic investor — one who maintains a specific focus in their work and in their investments and knows when a job is too large or too complex for one person — is a successful investor in the making. Keep your concentration, avoid distractions, stay informed, and always consider the risk of your investment, not just the reward.
Get Vallejo California Property Management
For Vallejo California Property Management Contact Utopia Management today by calling us at (800) 294-4656 or click here to connect with us online.