Real estate, in all its forms, can make for a hugely satisfying career. Whether you’re flipping houses or delving into rentals, you can be pretty sure of substantial returns, alongside the satisfying feeling of creating homes people love.
As in any industry, though, anyone looking to break into real estate needs to make sure they have the skills for a successful career. This is especially true as more and more big money moguls discover the joys of this industry. Go into things blind, and you’ll soon end up in a whole lot of debt as you fall behind those front-runners.
The question is, what exactly does it take to build a successful real estate undertaking? Sadly, that isn’t easy to answer, as each sub-sect requires pretty different things from you as a professional. Still, there are a few tools that seem to find relevance across the board, and we’re going to consider them here.
You can look at it any way you want to, but real estate is a pricey thing to get into no matter what stage you enter. Most notably, this is because, at some stage, you’re going to need to buy property of some kind. The good news for you is that a few different pricing brackets can help you to do this, including REITs and REIGs, but property is never going to be cheap. This certainly isn’t one of those ‘startup for $1,000’ companies that everyone’s so mad about these days.
Even after you’ve forked out for your property itself, you’re also going to need to consider additional payments like licensing fees, real estate membership dues, and standard marketing. With that in mind, you’d struggle to break through here without at least $100,000 to support your efforts. The good news is that, if you don’t have that much in the bank, you could always seek loans. The bad news is that you will need it in some form or another.
Given that you’re set to pay so much here, knowledge is also fundamental for giving you any chance at success in the field. Namely, you’re going to need to do your research into the basic types of investment, and what exactly each one can offer you. For instance, the main options you’ll face include –
- Real estate investment trusts (REITs) – Investment opportunities that build a steady stream of income and dividends. A hands-off way to make money from property for less.
- Rental properties – Either short-term or long-term rentals can be a lucrative but time-consuming enterprise. That said, landlords who use property management services can enjoy a relatively passive income.
- Property flipping – Buying cheap properties and doing them up for resale. While there’s no guarantee of returns, this can be an incredibly lucrative undertaking when approached right.
There are other areas, including turnkey properties and breaking into property management itself, but these are the primary three that you’ll come up against when you first dip your toes in the real estate water. By conducting adequate research into each, you stand the best possible chance of making the right choice for you.
While it isn’t the case for all property undertakings, you’ll also need a fair amount of vision the majority of the time. This is because, with rentals and flipping especially, you’re not just working with the bare bones of your investments. Rather, you’re selling a vision, and that vision needs to spell home to your clients.
In other words, a property investor who doesn’t spare any thought for things like decor and home appeal is never going to reach the heights that they need to make these investments worthwhile. While, to some extent, property location and potential do speak for themselves, you should also never underestimate how much buyers/renters go off first appearances.
When flipping, especially, you need to be able to envision how you can turn that ill-kept property into a family home. You will, of course, have a team of designers on board as your enterprise begins to take off, but the large part of the visionary design work will still fall on your shoulders.
The good news is that most of us develop these visionary skills from our own home enterprises alone. But, make sure that you’re also able to settle on the latest design trends to develop homes that always hit the mark with your clients.
It’s also fair to say that real estate, more than many other enterprises, requires your patience. You aren’t merely investing in a product and selling it on at a gain here. Instead, you’re investing in a long-term project. With renting, especially, the relatively small monthly income can take a fair amount of time to add back up to the amount you paid in the first place. That’s not to say that this can’t still work, especially if you’re renting a multi-unit building, but profits can undoubtedly take that bit longer.
The same can also be said with some confidence about property flipping. In fact, decent developments can take a fair few months or more from the moment you sign the contract for that house. With the potential for significant gains, many professionals are more than willing to wait that period, but the point remains the same – this is no easy earning fix.
As such, you need to have patience in every way possible. That means the personal patience to wait things out, and also a bank balance that isn’t screaming out for gains the instant you spend that sizable amount getting started.
A final word
Real estate investment is a tempting option for many, and the benefits of success in this industry speak for themselves. As you can see here, though, this isn’t a field for the faint of heart. Every single area of real estate is rife with its own challenges and requirements. And, only by stocking your toolbox in these ways do you stand any chance at meeting those tests every time.