No real estate investor intentionally sets out to be mediocre. No one wakes up and says, “You know, I really just think I’m not going to try today”. However, the fact remains that some real estate investors are much more successful than others. How does that happen? It really comes down to having the right habits, and being able to act on knowledge of the real estate market. What are the habits of the most successful real estate investors? Let’s take a quick look.
Highly successful real estate investors always have a plan. They never fly by the seat of their pants. They realize that being unprepared in this industry is the same thing as being uninformed. You’ll need to have a plan that details how you’ll reach your short-term goals, as well as your long-term goals. Of course, that means you need to identify what those goals are before you start investing.
The most successful real estate investors have in-depth knowledge of the real estate markets in which they invest. While they might be active in more than one market, they take the time needed before getting into the market to understand the various drivers of the underlying economy, the shifts in the real estate industry and more. You cannot afford to invest in real estate if you’re unwilling to take the time to build that same level of knowledge yourself.
Honesty and Integrity
There’s no codified set of ethics that real estate investors must adhere to, but that doesn’t change the fact that the most successful investors are honest and act ethically. They’re upfront and take care of their reputation. They understand that a reputation for lacking integrity, dishonesty or unethical actions and decisions can cripple their efforts.
It’s tempting to think that most successful real estate investors are all over the board. It’s true that some of them are, but you’ll find most of the really successful ones specialize in a particular area. This allows them to build very deep knowledge about the area and then exploit that knowledge to make savvy investments that really perform over their preferred timeline. Think of this as apprenticeship training – you master one area, and then move on to another, eventually mastering most or even all areas.
While you might think that real estate investing is about money, or real property, it’s actually about people. The most successful investors understand this intrinsically, and treat everyone with respect, from renters to business partners. They also understand that being respectful is the best way to gain referrals, which are responsible for a large percentage of their financial success.
They’re In the Know
The notion that you’re done with education when you get out of school needs to be eliminated. The most successful real estate investors are committed lifelong learners, and are willing to stay in the know about pretty much anything that will affect their markets, their investments or the real estate industry itself as a whole. This refers to everything from laws and regulations to shifts in political power to buying and selling trends for individual neighborhoods.
Knowledge of the Risks
While real estate investing doesn’t carry the same risks as playing the stock market, there are risks involved. Savvy investors not only understand those risks, but also know their own risk tolerance and tailor their investments toward those elements.
They Don’t Go It Alone
No investor is an island, and the most successful of them build a team to support their efforts. This includes a professional, reputable accountant who can help them handle the sometimes very complex taxation matters that go hand in hand with real estate. They also network with others, develop contacts with attorneys, form relationships with mentors and business partners, and more.
Now that you know more about the habits of the most successful real estate investors, you can begin to make progress toward securing your own financial future.