3 Secrets to Real Estate Investment Success
Success in real estate investment can be key to an abundant retirement. Here’s how to do it
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Aside from investing in start-ups in Southeast Asia, investing in real estate is one of the lucrative options out there. The potential for profit is attractive to new and experienced investors alike, but it is a risky business. The market value of properties changes from time to time, and any wise investor should know the right strategies to maximize profits.
As Rahul Varshneya writes in his Inc. article, “Gone are the days of stability — where you could spend 40 years working for the same company and retire comfortably. Nowadays, people are looking for alternative means for generating wealth and financial security.”
If you play it right, successful real estate investment can be your key to investment portfolio success plus a comfortable retirement. So how does one succeed in this business? Here are some tips.
1. Do your research
“’Supply and demand’ is the major factor that influences the movement of a property's value,” says Icel Dy, Vice President at property portfolio management company Spectrum Investments. She advises investors to do their research and get as much information as they can about the property they are looking at.
“Are there upcoming infrastructure developments that will make the property more likeable, as well as accessible? Are there surrounding developments like offices, hospitals, and schools that will boost up the housing need?” adds Dy.
But don’t get stuck in study mode. “It's true, you can't expect to start investing or flipping houses without a base knowledge, but investing is a relationship game first and foremost,” says Cody Sperber, founder and CEO of CleverInvestor, in Varshneya’s article.
2. Think long-term
Success in real estate investment doesn’t happen overnight. In this business, timing is the name of the game.
“A long-term investing mindset lets you utilize leverage, enjoy rental income, while you sit back and wait for the perfect timing to move for or from an investment, and not be affected by short-term market fluctuations,” says Dy.
3. Identify your purpose
One invests in real property for various reasons — for personal use, long-term capital appreciation, or cash flow. One must first ask why he or she wants to invest in a certain property because knowing one’s goals is crucial in preparation and planning for an investment.
Says Dy, “A clear goal will lead you to a clearer vision on what kind of property investment you need to pursue.”
Bonus Tip: Take out emotions
“There are things that we love, things that make us giddy, excited, nervous, and the like. But real estate investing, same as business, shouldn't involve feelings,” shares Dy. “Only use your emotions when buying your own home. Use your brain — analyze the ‘supply and demand’ and other significant factors when buying your property investment.”