Donald Bren and Barbara Corcoran are just a few examples of how investing in real estate can prove to be profitable. The most successful real estate investors share certain habits and personality traits, and strengthening these can help you expand your portfolio and maximize your returns.
Skill # 1 – Strategizing
Strategic skills are a must for investors of all types. The most successful real estate investors are planners who strategize in both the short and long term. Whether creating a business plan or identifying financial goals, investors who take the time to strategize are more likely to find funding for their projects.
Skill # 2 – Continuously Learning
Successful investors are continuous learners. They learn everything they can about real estate investing and the local market they want to invest in. They also recognize that the real estate market is continually changing, and staying up-to-date on the latest trends and statistics is essential.
First-time real estate investors can usually expect to make a few mistakes, but learning from them can prevent you from making them again. The great thing about the significant learning curve that comes with real estate investing is that you can continue applying the knowledge you learn to future investments.
Skill # 3 – Networking
Networking is another exceptional skill to have as an investor. As you expand your asset portfolio, you may find that you need a property manager or bookkeeper to assist with day-to-day duties. Networking with different lenders can also help you choose the right financing for your investments. Networking with inspectors, contractors, lenders, and realtors are all important relationships to have when becoming a successful real estate investor.
Skill # 4 – Decision Making
Real estate investors make important decisions that ultimately affect their returns. A few essential decisions you’ll have to make as an investor include choosing the right property, the best location, and trustworthy tenants. Even your design decisions can affect the demand for your property.
The lender and loan type you choose will also affect how much you earn on your investment project. For example, a loan with high fees can cut into your returns. Investors have many options for financing their projects, each with different requirements.
A conventional loan is the most-known option, but it isn’t always the best option for real estate investors. A jumbo loan may be an option for investors who need something quick, but failing to refinance out of it fast enough can cost you a lot of money. Debt service ratio coverage (DSCR) loans are popular among investors because eligibility is based on the real estate asset rather than the investor’s income or debt-to-ratio. VisioLending offers DSCR loans Kentucky residents can take advantage of. Investors in other states may also find use in DSCR loans.
Skill # 5 – Communicating
Real estate investors must be good communicators. Both written and verbal communication skills are a must when working in real estate. The ability to clearly express your plans may be necessary in obtaining lending. Communicating with your lender about your financial requirements and current financial situation can help you acquire the best loan.
Communication is also important when working with a property manager or tenants. You’ll want to keep your tenants as satisfied as possible to ensure they continue paying rent. Written communication skills are also necessary when creating a lease agreement. This ensures you and your tenants have clear expectations and helps establish a good relationship.
Skill # 6 – Patience
Patience can help as a real estate investor. Understanding that earning income from a property can take a while is a must as you start your career. Timing the market is important, which means sometimes investors may need to sit back and wait for the right economy to succeed.
Skill # 7 – Business-Minded
An investment is similar to a small business in that you’ll need to strategize, bookkeep, set goals, and manage others. Business leadership skills will definitely come in handy as a real estate investor. Working the day-to-day as an investor will help you strengthen these skills.
Skill # 8 – Problem-Solving
Successful real estate investors can recognize a problem and come up with a solution. Creative solutions can help minimize losses and overcome common challenges in real estate. Investors may often find themselves creating unique solutions to financing, renovations, or tenant contract needs.
Skill # 9 – Persistence
Real estate investing can present many challenges, and persistence can help investors overcome them. Additionally, the ability to be persistent helps investors adapt to new situations and deal with the day-to-day while still focusing on the long-term success of the investment project.
Certain skills and personality traits can help real estate investors do well. Most investors will find they have ample opportunities to strengthen these skills and expand their knowledge. Investing in real estate is largely a learning process, and the more you know, the better you’ll fare when it comes to your investments.