10 Point Check List
Success in property investment, or any field for that matter, is never guaranteed no matter how many right moves you make or how many advantages you have. Even if you have a wealthy family that can give you the starting funds, even if you went to school to learn how to invest in property, even if you’re selling the most popular homes to the most eager market, there’s always a chance of losing money, of investing too much and of failing to make it back.
That said, if you develop the right habits and hit the right notes, you can greatly improve your odds of making the profits you’re trying to make and being more successful buying, selling and renting real estate. Consider this a 10 point checklist of things you should always be doing if you want to be successful as a real estate investor.
- Organization and Education
Always start off any new real estate venture by getting educated on the market you’re looking into and staying organized the whole way. Throwing money into the game and hoping everything works out can be a great way to earn money in times of relative economic ease, but the market being as it is, there’s no quicker way to lose your money than to jump into investing without researching the market and staying organized. Set clear goals and stick to them. - Develop a Strategy
If funds are low, you may want to look into fixer uppers, low rent housing, apartment buildings and small houses. If you need to make an immediate return, go for rental properties. If you’re looking at long term investments, then look to buy and sell. You need to have a strategy based on your funds, your goals and your means. - Develop an Eye for Potential
Many investors fail because they don’t understand that great things must be built from the ground up. As legendary magazine publisher Jim Warren used to say: “Somebody has to make it happen.” The easiest way to blow a fortune is to buy the most expensive house you can find and try to sell it for a little more. Rather, look for homes and neighbourhoods that other people might not have any faith in and turn them around. - Location is Everything
Location really is everything, but keep number 3 in mind while you contemplate this point. An area might not be so great right now, but if a new shopping centre is being constructed in the near future, then it makes more sense to jump in now before property values in the area skyrocket thanks to the new job and shopping opportunities. - Claim Depreciation
When you claim depreciation, depending on the rules in your area, you may qualify for a number of tax breaks on your investment properties. You need every helping hand, every break you can get when investing in property, so keep this one in mind when you file every year. - Invest Far and Wide
A thirty minute car ride to a neighbouring city or a weeklong stay in Southern Australia now and then might seem like a big time investment right now, but you’d be crazy to restrict yourself only to local opportunities, especially if you live in a rural area where property values tend to stay rather low. - Always Pay Less than Market Value
Even if you know you can sell for higher, operate under the assumption that you’re selling a home at market value and never pay that much for it. It’s all about profit margin, and the further under market value you go, the more profit you’re going to make on the minimum price. - Buy Carefully
When buying property, you’re always going to be torn between ambition and caution. You don’t want to let fear control your investment dollar or you’ll never make any money, but on the other side of that coin are investors who are deep in debt because they’re constantly sinking money into high risk opportunities. Play the middle ground and don’t be afraid of a smart investment, but don’t get eager or impatient, either. - Have a Long Term Plan
Even if you need to invest in some short term rental properties right now in order to build your investment dollar up, you should always have a long term plan. You will probably, eventually, be selling bigger homes and renting larger buildings so that you can build long term wealth and retirement savings. Plan in both the short and long term. - Stay Involved
This is very important for people who rent out their properties but still of note for those looking to sell: Always stay involved in the market. If you stop doing your homework, you lose sight of what your investment is really worth. If you own the property, stay involved in the market in that area and make sure that you know what it’s worth.