Characteristics of a Victorious Real Estate Investor
To become a successful real estate investor one must have the capability to identify good real estate deals and invest in them. You should also be able to assess the true value of properties based on when you expect to sell. Your purchase must be made at a reasonably low price to allow for a profitable sale at a later date.
Real estate investing is a strange type of profession that has no accepted curriculum of formal training. The only way to learn the art of successful art of investing in real estate answer is for you to find a mentor who can teach you the secret formula. You must become an adept at appraising and finding out the true value of a property as this information is critical to make an informed investment decisions. Realtors, appraisers, and banks determine what a property is worth by studying recent comparable sales in the same neighborhood. You must be able to do the same.
Leveraging is key factor for investors in real estate because the less cash you part with on each transaction, the more properties you can buy with your total available money. If you are long-term investor, leveraging will work in your favor if the markets in which you invest appreciate in the long run and your income from the properties can pay for most of your monthly debt.
Exit strategies are also equally crucial to successful investing. As a real estate investor you must know exactly when to sell the property even as you buy. You must completely study the market and your work out your plan even before you invest. Real estate investors can help you interpret market indicators such as the average length of time houses have been on the market. This information it will help you make better investment decisions.
Successful investors make it a point to review their portfolios at least once a quarter and work aggressively to get rid of the losing properties before they can seriously erode the profits from their winners. Bestow enough attention to protect your properties from creditors, plaintiffs, and the taxman. It is no doubt complicated, and time consuming – but yet every successful investor takes the time to do it, thus assuring that their hard-earned money is not imperiled.
To succeed in real estate investing, you must cultivate the art of moving with people as the business is built around people – sellers, tenants, contractors, agents, financiers etc. Since there is no written code of ethics for investors, it is up to each investor to decide how he will deal with customers, tenants, sellers, workers etc.
Do your market research thoroughly and look at houses that are priced lower than comparable properties in the neighborhood. Purchase the property with the lowest possible cash down-payment and get the seller to carry back a second mortgage or deed of trust for the property. If you can get a low enough price and generous terms you can make almost any property into a successful investment.
Finally, one last important rule for investing in real estate is – do not become sentimental about a property that you are purchasing for investment. Always look at the property from the viewpoint of a critical purchaser and a businesslike investor.