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The Keys to Successful Real Estate Investment

The Keys to Successful Real Estate Investment
by John Carlucci - August 19, 2021

While investing in the real estate market, you will experience the rules, tips and hacks that differ for each piece of real estate. That being said- experience does draw a basic map for you to refer to when you set out to invest in real estate. That is why we have consulted professionals in real estate for their best tips. You can learn the basics that can help you achieve success in real estate investment while avoiding some pitfalls along the way.

  1. Take Advantage of the Untapped Market

“Buying a property from a struggling seller is great since you may obtain it for a fraction of the market value. Forget about foreclosure auctions; they may offer bargains, but they frequently include houses in desperate need of repair. Instead, seek properties that haven't been put on the market yet because the sellers are distressed. 

“The perfect sellers are a divorced couple or a family looking to sell Mom's home after she passes away; they want to receive the money, and the buyer will most likely be getting a well-maintained property.”

Charles McMillan, businessman and Founder of Stand With Main Street

  1. Manage Your Risks and Strategies

“Never invest in a property without first learning about the risks and several exit strategies. For example, let's say you're new to real estate investment and don't have a lot of cash on hand. In that instance, you'll want to reduce your risk by investing in homes with higher potential and good numbers for rental purposes.

“It can also be tempting to rush a purchase when you should take your time to consider all aspects of the investment. However, keep in mind that rushing into a purchase can considerably increase the risk factor. Surveying many properties, learning about their market conditions, and making a final commitment is the best approach to make a sensible decision.”

Sep Niakan, Managing Broker Condoblackbook

  1. Location Is The Most Important Factor

“Every real estate investor has probably heard that location is the most important factor in success. In fact, skilled real estate investors will tell you that the three most important variables to consider before purchasing an investment property are: location, location, location! But why is that?

“For starters, the location is always the same. You may change many things about an investment property as a real estate investor, but you can't change the location of your income property! Until you sell an investment property, you're essentially locked in the location where you bought it.

“The importance of location in real estate investing is also due to the fact that it determines supply and demand: successful property owners always seek for areas with an acceptable supply and high demand. The location's supply and demand also influence how much rental revenue you may charge for your investment property and how much your operating expenditures will be. As a result, the profitability of your rental property will be determined by this.

“Finally, because location impacts appreciation, it is a key performance aspect in real estate investing! The land is a scarce resource that accounts for a significant percentage of the cost of an investment property, and some areas will gain more in the future than others.”

Adam Garcia, Founder of The Stock Dork

  1. Positive Cash Flow

“The profit made each month from a rental property is known as positive cash flow in real estate investing. The major reason positive cash flow is such an important success aspect is that the greater the difference between rental income and rental expenses, the higher the rate of return on investment. Successful property investors look for positive cash flow investment properties because even if the real estate market is down, the real estate investor can still make money by renting out the property until the economy improves. 

“Additionally, positive cash flow tends to improve with time, allowing income property investors to generate even more money with each passing year.

“Furthermore, positive cash flow reduces a real estate investor's mortgage, resulting in an increase in the equity of the income property! Not only that, but a successful property owner can save the excess cash flow for a down payment on another investment property. As a result, positive cash flow is a critical success factor in real estate investing because it enables income property investors to purchase and own several investment properties!”

Eric Carrell, Chief Marketing Advisor SurfShark

  1. Maximize the Real Estate Value

“True real estate investors understand how to enhance a property's value in order to maximize its commission. You can accomplish the same thing by adding extra features to the property or its surroundings, increasing its appeal to potential clients. It will assist you in generating significant rental income from something you previously assumed would have little effect on your cash flow. 

“Adding a concierge or a security guard to the building, or providing a value-added service like garbage removal from someone's door to the dumpster for a little monthly fee, are some of the finest ways to increase the property's worth.”

Darshan Somashekar, Founder & CEO Spider Solitaire Challenge

  1. Build a Network

“I have been investing in real estate for over a decade and I have found that the most important factor to being successful investing in real estate is relationships. Having a great network of agents, property managers, wholesalers, contractors, and other investors will greatly increase your chances of success. Leveraging other people's expertise rather than trying to do everything yourself is one of the keys to being successful in real estate investing.”

Erik Wright, Owner New Horizon Home Buyers

  1. Insurance

“Insurance is a must for investing in real estate: Get the most out of real estate investments by getting the proper insurance to protect your assets. There are some baseline types of insurance that are necessary for investors, from hazard and fire insurance to liability insurance and sewer backup insurance. If an investment property is located in a flood zone, flood insurance is a must.

“Without these basic types of insurance on your investment property, you are at risk of losing all financial gains. Hedge your bets by accounting for the costs of insurance before purchasing an investment property to get the most out of it.”

Andy Kolodgie, Owner of The House Guys

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