Land cannot be produced but to be shared only and this makes real estate the most promising commodity of all times. Real estate, the highest ROI offering market with secure investment is ever fertile market to accommodate all who can afford to cross entry barriers with their huge financial resources. If you are reading this article, perhaps you are already in the game or have buckled up for a fall.
Our current article 10 strategies of a smart real estate investor defined will give you insights of investing in real estate while How to buy a house in 9 steps drives a general user in process. You might be making good profits in real estate investment but being a smart realtor is quite different and our article will enable you to get maximum out of it.
- Market Research
Are you open to invest in any cities and areas? Are you looking to invest in residential properties or commercial properties? Are you open to buy in auction and know where to back off or to fight for a bid? Are you looking forward to long term or short-term investments? Are you looking towards acquiring lands for a society? These are the key questions an investor should be looking to answer. An investor is the realtor who purchase real estate deals on investor’s price and offer them on market to other sellers. Digging out good deals, price evaluation, negotiations with sellers, expected market price, knowledge of local laws pre requisites, taxation etc., are the key questions that an investor needs to know the answers of. You don’t need to be an analyst with professional degrees but a general market research can do the job for you. To start with, you need to know the cost at which you are picking a real estate investment deal, the current price of the asset in open market or if holding the deal will be offering more.
Start surfing properties on Michni, compare the chosen one and start scheduling your visits. The more you explore the better you will be with your market research for investment in real estate. Hint don’t fall for irrational property deals.
2. Due Diligence
Do due diligence of the sellers, buyers, agents and the proposed property to stay away from any scandals or financial losses. Don’t fall for a faulty property and don’t deal with parties of bad reputation for peace of mind and seamless operations. To be on safer side, you may need to tie up with property document verification service that alone can save you millions and lets you enter in deal with a peace of mind and to avoid un wanted associated risks.
3. Keep the doors wide open for opportunities
You need to be proactive and ready to grab the raised opportunities. Most of investment opportunities are the one with a cash seeking sellers who are willing to sell below market price for immediate needs. Don’t rush in greed, do the necessary market research and get the deal but don’t be too late to lose the deal.
4. Do hunt off the market deals
“You make real savings at purchase not on a sell “is a famous business saying. Don’t expect extra ordinary profits from a deal on market but seek off the market deals, crack them and bring on market yourself for higher ROI. Check your buying capacity, set a minimum number of deals that you want to invest in and start hunting.
5. Be a sharp negotiator
If the table is not in your favor, turn the table around. A seller may be asking for a high or market price but it should be you to bring him (er) down to the positive aspects of what you are offering. Focus on odds of the proposed property e.g. Upgradation needed, year built, neighborhood or offer accelerated closing date with a large advance payment or to lease the property back to the seller if they cannot move out in time. Do remember, it’s not always the money to crack a deal.
6. Never enter in a deal that you cannot close
Insufficient funds, busy schedule or any others constraints can affect your credibility and can bring you financial losses Higher risks higher returns is a known terminology of financial world that needs to be tackled with calculated risks only. You are not a gambler to risk everything but an investor who needs to play balanced, take calculated risks, never fall for irrational returns or faulty property.
7. Sell the deal to first good offer
You cannot steal all the profits from a single deal but need to settle a target ROI. The idea is to resell the purchased to the first good offer you get. Don’t react like a house owner who hesitates to sell it or bears emotional attachment with it. Do remember you are an investor and the purchased property is just an inventory that is meant to be sold at higher price, the sooner the better. Additionally, you don’t have to hold a single bid in hope of more profits, instead choose the higher frequency.
8. Build a Trustworthy Network
You need to build a network of real estate agents, Developers and investors who can help you hunting new deals, adding value to the portfolio you hold or to sell the inventory faster and to buy your inventory otherwise. An efficient network will forward a deal where only down payment or advances are paid and make good profits out of it for you. This network of your will help you in market analysis, hunting off the market deals or to place your offered portfolio in market and sell it faster.
9. Be Open to Joint Ventures
Real estate in reality is a game of elites that needs bulk of funds to seize the raised opportunities. Here family funds of a single investor wouldn’t be sufficient enough no matter how much the available funds are. You must be open to joint ventures with other investors to expand your investment portfolio and your profits.
10. Marketing Mix of short term and long-term real estate investment
De-valuation of money, higher inflation, no steady income, higher risk and no properties ownership in long run are a few disadvantages associated with short term investment. While, on other hand, a long-term investor sacrifices higher returns on investment and acts a little shy to end user. The better way is to make a marketing mix of both for best results enabling you to enjoy rental incomes, higher returns and owning multiple properties ownership at retirement.
If success is a process with a number of defined steps, then it is just like any other process. So, what is the first step in any process?