So you’ve decided to become a real estate investor. Congratulations! If we had confetti, we’d certainly celebrate your decision. Joining the business of real estate investment is an exciting prospect that holds endless opportunities to make passive income for any number of reasons, from retirement to Aruba.
As exciting as it can be to join the community of real estate investors, it’s daunting, too. There’s a lot to learn and take in when you’re starting out — but you don’t have to do it alone.
6 Truths and Tips for New Real Estate Investors
Investing in real estate isn’t easy.
If anyone tells you that investing in real estate is a piece of cake, they’re lying or trying to sell you something. Real estate investment, though it generates “passive” income, is not made up of passive people. It takes constant, everyday efforts to meet goals and find success. There will be days when you want to quit. That’s okay — but work hard and push through it. It was never meant to be easy.
You’re going to make mistakes.
It’s true. The learning curve for real estate investment is long, and you’ll keep learning as long as you’re in the business. Allow yourself to make mistakes! Take smart chances. Accept risk. Most of all, learn from the mistakes you make. Apply what you’ve learned for next time. Don’t let fear of failure deter you from making the decisions you know you need to make.
Network, network, network!
In many ways, real estate investment is a social business. Network with fellow investors, real estate agents and people in your life that may be able to generate leads. Not only can networking help you find new properties and good deals, but connecting with real estate investors that have years and years of experience gives you access to solid advice, a system of support and a knowledgeable outside perspective.
Focus your business.
Can you name all of the types of real estate investment? It’s a lot. Typically, we only think of multifamily and single-family rental properties, but there are plenty of varieties out there. Don’t be afraid of diversifying your portfolio. If something interests you, try it. Finding your niche takes risk and experimentation, but it’s infinitely rewarding. Narrow down what sort of investment properties you enjoy owning most. It won’t happen overnight, but you’ll be glad you did it.
Work within your budget.
It’s easy to fall into the trap of making comparisons. Don’t worry about how much capital other investors have to throw around, especially when you’re just starting out. While in some ways you are competing with other investors, you don’t need to break the bank trying to run with the big boys. Know your budget and stick to it. It’ll save you a lot of regret and wasted money (that you can't afford to waste) in the long run.
Patience is key in just about everything, but it’s especially true of real estate investment. Take the time to do things right instead of fast. Whether that’s making renovations, finding tenants, closing deals or meeting your goals. Take your time. Success doesn’t happen overnight, and that’s the way it’s meant to be. You’ll be glad you took your time.
What advice do you wish you had when you were new to real estate investment? Share with us in the comments.
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