As an entrepreneur, there are many great reasons to consider real estate investment; it’s varied, comes with a bunch of tax advantages, and presents the opportunity to create numerous passive income channels to last a lifetime. That said, it’s rarely a walk in the park – real estate investment isn’t for everyone, so just what does it take to make it in the real estate game?
Here are six examples of what it takes to make it as a real estate entrepreneur.
1. Ever-expanding industry knowledge
You can’t expect to get very far in any industry without having a good grasp on it, and of course, the real estate sector is no exception. An investor’s ability to recognize opportunities largely comes down to their economic understanding of the market and the trends that are driving it.
House values, rental prices, demand, inventory supply, mortgage rates, landlord regulations – these are just a few examples of the knowledge base that any savvy property entrepreneur must hone, and stay on top of. Commitment to maintaining a comprehensive knowledge of the industry is essential to make it in the real estate world. Knowing which are the cheapest states to buy property in the US is a good start, but the markets surrounding a deal make all the difference as to whether it is a shrewd investment or not.
2. Grit and determination
Market fluctuations, flakey buyers, rogue tenants – real estate investment isn’t for the faint-hearted; yes, there can be big wins, but the road towards them can feel epically discouraging at times. Successful real estate entrepreneurs have grit, determination and tenacity in spades, understanding that the real, long term rewards are only available by pushing through the obstacles that will inevitably arise. If you’re easily deterred, real estate investment isn’t for you.
3. Tech-savviness
Before the pandemic, industries like real estate were steadfastly heading towards an increasingly digitized world; when Covid came along, driven by necessity, that trajectory took to warp speed. These days, it’s virtually impossible for a property investor to get very far without being ultra tech-savvy. With consumers expecting high-end virtual tours and super easy digitized transactional processes, big data analysis becoming the bedrock of property value forecasts and blockchain tech even starting to show early signs of revolutionizing the industry, real estate entrepreneurs need to eat, sleep and breathe the latest tech to stay ahead.
4. Vision
Some property investments may be as simple as buying, holding and tenanting, others require a little more thought. Many great real estate entrepreneurs have made their fortunes by having bold vision and acting upon it, and so many properties are diamonds in the rough, just waiting for a dynamic investor to come along and realize its potential.
Envisioning how a property could best perform and then acting on that vision is what sets great investors apart from average ones.
There are many ways to optimize the use and profitability of a property, including adding bedrooms or bathrooms or carports, converting large buildings into multi-tenant complexes, investing in properties that will benefit significantly from minor upgrades, and many, many more. Savvy investors can spot opportunity a mile away; they have the vision and they follow it through – they don’t just find great deals, they make them happen.
5. Informed risk mitigation
As with most business ventures, investing in real estate comes with risk. Market fluctuations, issues with tenants, and the risk of being held liable for injuries that occur on your properties are just a few to mention. Successful real estate entrepreneurs go into deals with their eyes wide open to the risks, and make their decisions accordingly. Mitigating risks as best as they can, knowing when to walk away and taking the highs with the lows is all in a day’s work for a real estate investor.
6. Playing the long game
It takes patience to make it big in the world of real estate. Patience, vision and the willingness to keep the focus on the long game. Sure, some opportunities will result in short-term wins, but successful investors make sure to diversify their portfolios with a range of properties that reflect both short and long-term plans. Of course, capital must be built-up before an investor can park any significant funds into a long-term project, but wherever possible, shrewd investors are willing to.
Final thoughts
Real estate has long been known as an industry capable of making many people very wealthy, but it’s rarely a lottery-like win – those most likely to succeed in property investment have these and a range of other qualities that set them apart from the rest.
