Real estate is one of the best avenues for building wealth and passive income. It’s said that owning property has created the largest number of millionaires. Unfortunately, not everyone succeeds at becoming a millionaire through real estate.
This could be due to the lack of certain character attributes that all real estate tycoons have. So, what does it take to be a successful real estate investor? Keep reading for 7 traits you should develop if you are keen on investing in real estate.
1. Real Estate Knowledge
The first key trait you need when investing in real estate is knowledge of the industry. You will find that the best investors know the most about real estate. They keep upgrading their knowledge by reading the latest books and industry news.
They also network with other successful real estate investors to pick up the latest tips. The more informed you are the less fear you will have when making investment decisions.
Don’t drop any money until you have taken some real estate courses and read the fundamental books on the subject. Otherwise, you may make some costly yet avoidable mistakes. In this age of information, there is plenty of quality real estate information that you can get for free or at a negligible cost. From YouTube Videos to blogs and books.
The basic knowledge you must get includes knowing how to recognize an undervalued property and estimating renovation costs. You must also learn the laws surrounding real estate investment.
Another key skill you must have when investing in real estate is patience. Real estate sellers like using scarcity strategies to pressure buyers into buying properties that may be bad deals. Successful real estate investors know how to wait patiently for the right deal. They know that even if they miss out on an investment opportunity another good deal will still come around.
Many novice investors also lose a lot of money by jumping into property deals at the wrong stage of the market cycle. A good rule of thumb is to go against what the market is doing. When everyone is buying property, you should be selling as prices are higher.
On the other hand, when everyone is selling it’s a good time to buy as prices are lower. It takes nerves of steel to act against the market, but this is how many real estate tycoons made their millions.
3. Negotiation Skills
Real estate investing requires a lot of negotiation. You will have to negotiate with buyers and sellers on property prices. You will also have to negotiate with contractors on renovation costs.
You may also need to negotiate with lenders on mortgage interest rates. The better you are at negotiating, the more money you will make. You’ll also be able to get the best deals for your clients.
Another key trait most successful real estate investors have is uncommon vision. You should be able to see the potential value of a property.
Most people will look at a run-down house and want nothing to do with it. A real estate investor sees that a bit of renovation and a few value additions could transform the house into a marketable property. So they can buy the property at a throwaway price, improve it and sell it at a profit.
Investors always look for ways to improve the value of a property as this is the best way for them to make money. For instance, adding an extra bathroom or an extra bedroom could increase a property’s value by thousands of dollars. Other real estate investors see a plot of land and can think of several different ways to make millions out of it.
If you want to succeed at real estate investing you will have to develop your vision.
Successful real estate investing requires extreme focus on one’s goal. Profitable investors know exactly what they want and can stay focused and committed to their goal. Using the Pareto principle, they also know what tasks they should focus on to get maximum returns.
Dedicated real estate investors learn to delegate distracting tasks to assistants so that they can spend their time on profitable duties. During their journey to success, investors also face many setbacks and obstacles. But their focus on their goal keeps them from getting distracted until they eventually succeed.
Lack of focus is what leads many people to fail at real estate investing. They usually give up when they face their first failure or obstacle.
Another key skill that all successful real estate investors have is the proper use of leverage. Real estate is a cash-intensive business. So investors need access to other people’s money to buy and renovate the property.
Lack of access to cash could close you out of many lucrative real estate deals. You must also know how to leverage other people’s skills to grow your real estate business. Smart investors know that they can’t do everything alone so they partner with or hire talented people that can help them grow their business.
Relationships are the key to success in any business venture including real estate investment. Those with the best business relationships get more success. For instance, they may get classified information about potential real estate deals from their network.
You might also get faster approvals from the council for work they need to do on properties. One important relationship a real estate investor needs is with a private lender for mortgages. They are the ones that will give you the financing needed to buy investment properties.
Develop These Traits to Find Success With Investing in Real Estate
Real estate is one of the best ways to achieve financial independence. But you must have the right character for it. The most successful real estate investors all have a lot of real estate knowledge.
They also have intense focus, patience, and strong negotiation and relationship-building skills. It’s a good idea to start developing these traits if you want to succeed at investing in real estate.
At LendSimpli, investors can get the funds they need to close on their next real estate property. Apply today to get a rental loan that best suits your needs.