Real estate sector is a great support to a country’s economy, it provides job opportunities, a platform to build businesses of off and most importantly; it provides functioning living and commercial space for the increasing demand. As attractive real estate is; it gathers a lot of attention from entrepreneurs and new business startups for secure and stable investment.
There are numerous successful real estate agents that have stood the test of time in the real estate industry. The real estate market naturally fluctuates between favorable and unfavorable conditions for the investors; however the smart workers in the field always come out on top. It takes a specific set of decision making skills and traits while investing to assure the chances of success and profit in a real estate deal. Most of the successful real estate investors share these investment techniques in common which allow them to get the best deals.
In this article we will take you over these traits and explain why it that these techniques allow for success in real estate investment.
Successful projects in any field of work demand extensive and smart planning for carrying out work related operations. Same is when it comes to real estate industry. For an industry as vast and webbed out as real estate diving head first into investment without any layout or plan can lead to disastrous results. Last thing any real estate investor wants is a deal that leads them to financial loss.
Planning in real estate can apply in different parts of dealing. If you are looking to buy out properties on the market, conducting methodological research on the specific areas that yield better returns on investment, knowing which areas are going to develop soon and what kind of property is in high demand in the current market is important. On the basis on such planned out research you can set a standard for the types of investment you want to make.
Similarly the aspect of planning is also extremely important in managing finances. You do not want to rush into an investment on the basis of a loan that can potentially lead you to debt. Planning about how much you invest in a property and potentially how much value you can get out of the investment is the name of the game in real estate industry. Managing the rent and repair costs on your rental property, cash inflows and so on are also a well regarded practices amongst smart real estate investors.
Overall a business plan in the real estate industry is going to a long way to shape the path of your investments, making them more stable and secure. A newbie at the industry might think targeting hotspots like DHA, Bahria Town and Gulberg in Islamabad is all that it takes to be successful; but reality is not that black and white. Careful and extensive planning is always appreciated.
You may have heard the quote of ‘honesty is the best policy’ this also applies greatly towards success in real estate industry. Honesty can work greatly in the favor of reputation of a real estate investor. Take the example of a dishonest investor that has put up quick fixes on a rundown property to make it seem much more than its actual worth; even if such a dishonest investor gains short term success by selling this cleverly veiled property; once the buyers discover the truth; the investor will not be trustworthy for surrounding investors and buyers in real estate.
On the other hand consider a honest real estate dealer that does not play tricks on unsuspecting investors and single time buyers for some extra cash, is going to be a lot more respected and looked up when people look to deal in real estate. In an industry that is unfortunately as riddled with scams and frauds as it is; honesty is one of the best traits an investor can adopt to make their business flourish.
Specialize in your investments:
Real estate is a vast industry that has a variety of different types of investments that can be made. Ranging from lone standing plots, to under construction buildings, fully furnished houses to commercial properties of all shapes and sizes, buying newly built apartments or investing into pre existing rental properties, house flipping investments, refurbishing investments etc are all valid options.
For the sake of simplicity many successful real estate agents stick to a single type of investment they find they can be successful with. This does not always have to depend upon what the market conditions favor but also on the individual situation of an investor. For example a bachelor who is a young and ambitious entrepreneur might find it manageable to look over multiple rental properties, whereas another person with a family that values their social life might find the same investment too tedious.
That is why specializing in a niche while investing in real estate is beneficial for the success of an investor. Not only will you be able to manage work easier the experience you gain with the type of investment is also going to make decisions and predictions on future investments easier.
Knowledge on real estate market:
A successful investment on the real estate market cannot be made without good knowledge of the market. Know how of the current state of market is necessary for good investments. Knowing the market trends, keeping an eye out for the newly developing areas, making predictions based on this knowledge, keeping in touch and learning from experienced peers are all going to make an investor more aware of the market situation. Without this knowledge the risk of making bad investment is much more prevalent. Knowledge about the industry and dealing can further expand to keeping up with passing of new property laws, tax distributions, change in terminologies that can affect a deal’s outcome.
Knowledge of real estate market is going to be the glue to one’s planning strategy for their real estate business as well as make one aware of what kind of investment is suited best for them. staying up to date about real estate industry can also help adapt in situations of fluctuation in market state to avoid any losses.
Networking is another key to success in real estate industry. A smart investor always keeps their ears open for advice that is going around and keeps in company of successful investors to learn from their experiences. Networking can also help an investor gain referrals of deals if a friend of yours thinks that a particular type of deal can be handled better by you. In this way networking can help increase your visibility on the market and get you more deals.
This can allow one to choose mentors for them as well as act as a supporting group of professionals for each other’s business. Have a look out for the successful real estate agents and investors; they will always be a part of an interlinked network rather than working solitary.
Asking for help:
As we discussed above, a good investor knows to learn about the real estate market and keep in good company of professionals. At times the learned knowledge from one’s mentors can still be confusing to apply 100% to one’s own work. A good real estate investor does not shy away from asking their peers for direct help on deals they find conflicting for their own knowledge.
Successful investors let go of the issue of personal egos and pride when trying to work and realize that the financial investment in getting help from experts is going to be worthwhile. Many puzzled investors can hire managers for the renting and management of their commercial and residential properties. In an effort to understand about a particular deal, good investors like to take the time to take consultation sessions with experienced real estate agents to assure the success of investment. It might seem simple to go for investing in upscale and posh neighborhoods of Bahria town and DHA but there is still more to what meets the eye and it is always a good measure for successful real estate agents to account for second opinion.
Account for potential risks:
Relative investment opportunities like stock exchange investors made well aware of the potential risks of investment, however when it comes to real estate most of the investors see the opposite being advertised to them. Seasoned and successful estate investors are smart enough to always keep a check and balance on potential risks in their investments. Risks not only in the investment phase of a real estate deal but also keeping an eye on the changes in law and policy that can result for a loss in their business.
After weighing in the pros and cons and calculating the potential of the opportunity, good investors will adjust their business plan accordingly to better manage with the risk factors involved. A house in Bahria Town might be a low risk investment but vigilant investors always keep a plan b in their back pocket.
The crux of the dealing in real estate industry revolves around dealing with people. Therefore real estate investors of good repute and the ones that gather most success in their dealing keep things honest and professional. All successful investors know to value integrity and knowledge in the field as well so that their deals can be assured.
Real estate isn’t a completely risk free investment either, so planning and adjusting accordingly is also key for successful real estate investors in the industry.
Read along as we continue this article with a part 2, shedding light on more qualities that lead to success for investors in real estate market.