The real estate industry continues to be one of the top picks among new investors because it had proven to expand gradually over the decades. Although the expectancy is that real estate assets will rise over time, becoming an investor requires a series of steps. Same as with any other business, there's knowledge to acquire, skills to be developed, and several other critical steps described in the following paragraphs.
Learn the industry inside-out
Education is the cornerstone of each successful career and it should not be an exception when it comes to real estate. Thanks to the internet, people can find valuable information online, provided by experts in the field. Successful real estate investors are sharing their experiences with the broad audience, to help others accelerate their learning curve and become investors themselves. One of them, who shared with us a few tips for this article, is Ofir Eyal Bar, a real-estate investor with a multi-million dollars property portfolio that owes his own success to such online education, and therefore decided to always keep sharing his knowledge and experience with the youngsters.
With an abundance of information available both free and paid, new investors have access to insights and valuable tips, helping them navigate through the early stages without making all the rookie mistakes.
Find the right real estate sector
One of the qualities investors must adopt is to find value where few people think there is one. As a result, choosing the right real estate sector would be one of the hardest but at the same time, the most rewarding decision ever made. Ofir Bar suggests that it should be done based on a series of factors like:
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Housing market trends, influenced by population growth, employment numbers, or mortgage affordability
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Indicators like property prices, rental rates, or price-to-rent ratio
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Infrastructure projects and opportunities for home construction
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The compound real estate market appreciation rate over a given period
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Tenant occupancy or vacancy rates etc.
By following this method, a rules-based investing methodology will be developed, and the only thing left would be to implement it repeatedly.
Build a network
Being a real estate investor and managing holdings should be a social activity and not a solitary endeavor. That is why most successful investors had managed to build a real estate network.
Having a well-based network will not only mean access to information about new potential investments but at the same time, it will provide expertise on matters that are unfamiliar. A network should include at least a mentor, a real estate agent, a good accountant, a lawyer, and a home inspector to examine properties. Handling all the tasks alone could be overwhelming, the main reason why investors delegate others to handle them. For beginners, though, balancing costs with revenue is one of the main concerns.
Manage investments properly
This step generally applies to real estate investors having rental properties. Since buy-to-rent is one of the most popular strategies in the industry, knowing how to manage an investment will be an important asset. What beginners don't know is that tasks like finding and screening tenants, collecting rent, rental maintenance, repairs, and others, can't be skipped.
The good news is that investors have two options: they can either handle everything themselves or pay a professional property management company, in exchange for a fee. Most of the beginners tend to take care of everything, since their revenue is low, and they need to reduce expenses. However, as things progress, adding a property manager to the network will improve the renting services and make clients happier.
* This is a contributed article and this content does not necessarily represent the views of realtytoday.com
