A guide to achieving success in real estate investment part 1
By: Nick Stratton
The majority of this article as well as the following article will be based upon an article from Investopedia.com titled 10 Habits of Highly Effective Real Estate Investors by Jean Folger.1 This first portion will summarize her first 5 effective habits, adding additional insight and or other sources to further support these effective habits. To view the full article, see the citation listed below.
1- Treat investments as businesses: In a book by Michael J. Glauser about non-profit organizations, it states that the difference between success and failure stems from applying this principle.2 Good businesses and investment returns do not happen by accident; they are the product of hard work, goal achieving, effective planning, and careful analysis. For example, some owners forgo analyzing their investment costs when they wait to achieve a high rental price rather than pricing their home to rent out quickly. As a result, they lose another month of rent over an extra $50-$75 dollars a month which equals less return than if the landlord had priced their home correctly based upon market conditions.
2- Know their markets: the saying goes “knowledge is power” which certainly applies to knowing where and when to invest in real estate. Although no one can predict the future, there are reports and indicators that can guide one who invests in real estate. For example, a recent article in Forbes.com 3 highlighted economic areas in the U.S. that are declining. Other sources may include local or national reports such as the Cromford report 4 or Case Schiller index. 5 Careful study of historical figures as well as discussions with local professionals aids in minimizing risks.
3- Maintaining High Ethical Standards: Acting ethically will do more in the long haul than taking advantage of situations or people to get ahead quickly. Since investing wisely involves many parties, the stronger these relationships, the greater your chance for success. One can not build strong relationships without high ethical standards.
4- Develop a focus or Niche: Most businesses expand because they developed their core competency first. As you perfect your business model, you will provide yourself with the highest rate of return on your investment. You can then branch out into other areas of opportunity with more capital than trying to tackle it all with less. Many companies buy out their competitors or invest in other fields beyond their expertise with this strategy.
5- Strive to be good customer service representatives- Whether working with associates, business partners or clients such as tenants; great customer service keeps relationships strong and business transactions smooth. When looking at partners, one should also ensure they value providing excellent customer service.
1-Folger, Jean. “10 Habits Of Highly Effective Real Estate Investors.” Investopedia.com – Your Source For Investing Education. Web. 04 Apr. 2011. <http://www.investopedia.com/articles/mortgages-real-estate/10/habits-of-effective-real-estate-investors.asp>.
2-Glauser, Michael J. The Business of Heart: How Everyday Americans Are Changing the World. Salt Lake City, UT: Shadow Mountain, 1999. Print.
3-Brennan, Morgan. “Cities Where Economies Are Getting Worse – Forbes.com.” Forbes.com. 16 Mar. 2011. Web. 04 Apr. 2011. <http://www.forbes.com/2011/03/16/cities-where-the-economies-are-getting-worse.html>.