“The wise young man or wage earner of today invests his money in real estate.” -Andrew Carnegie
One of the many mistakes a novice in real estate investing makes is to believe it can be an overnight venture—one they would learn quickly and excessively profit from right away. Unfortunately, as enticing that deal may sound, real estate investments take time and more often than not, some of the properties you had been looking to profit from would not do so well.
Apart from this, it is also worthy to note that even the best-looking properties—even one from The sandstone at portico, could actually result in a bad deal. This is because deals are not always contingent upon how aesthetically presentable a property is.
While that may sound like an incredible deterrent, it actually is not. The failures and bad deals you make along the way would only contribute to your experience as an investor and make you a better and seasoned one. As a result, you would be making better deals and would be rewarded generously for your efforts. Like any other investment endeavor, a thorough understanding of real estate is not only essential but pivotal to the success of your investment. Furthermore, a sense of commitment is required for your deals to flourish. However, it would be helpful to utilize some tried and tested tips and techniques that have given results over the years they were used.
1. Understand that every property has a lifetime
While properties are not sentient beings, this does not mean that they do not have lifetimes. Much like anything else in this world, they would also go through the regular phases of wear and tear. If you are an investor, overlooking this fact can be a fatal mistake. While it might be an added expense, forking over cash for repairs like a new coat of paint, electrical system upgrades and the like will eventually be worth it. After all, who would want to buy a dilapidated or worn out looking property?
2. Focus on one investment type at a time
This is crucial when you are starting out. You do not want to focus on too many properties and spread yourself too thin, so have one type of investment at first. Whether this may be offices, retail, land or apartments are up to you. However, before you start to venture on to another type of property, it is better to be the master of one at least.
3. Be an investor instead of accumulator of commercial properties
Do not immediately acquire a whole lot of properties that would end up sitting for months and even years without making you any money. After all, the reason why you went into real estate investment is to make money, so it is only understandable that the properties you acquire should. If you bought property that has made no income or profit for you, you are not really investing. You just bought yourself a new property.
4. Determine whether your assets are adequately protected
Consider that your assets would be one of your prized possessions, this means you need to adequately protect yourself. Unfortunately, no matter how thoroughly you have checked your properties, legal entanglements can still happen which is why it is imperative that you protect yourself. So, ask yourself what is at stake if you lose a lawsuit, if the property is well protected and if your other investments would not be affected by the lawsuit of one separate property.
5. Get a mentor and learn from his or her mistakes
Having a mentor is an excellent way to learn the ropes of real estate investment. Additionally, this means you get to observe them and learn what their best strategies are as well as learn from the mistakes they have committed. Lastly, having a mentor opens you up to potential resources and connections you would normally not have any immediate access to had it not been for your business relationship with your mentor.