7 Habits of Highly Effective Real Estate Investors
Stephen Covey hit business and self-help gold with his classic, 7 Habits of Highly Effective People. We’re inspired to create a 7 Habits of Highly Effective Real Estate Investors edition! What tricks, tools, and mindsets do you need to build a strong investment portfolio, minimize risk, and maximize returns? Let’s find out!
What do effective real estate investors tend to have in common?
- They Have a Plan. Effective investors view their real estate acquisitions and deals as a business, not a series of discrete activities. As such, they have short- and long-term goals, and they can see how each step works in terms of the big picture. A plan guides them, keeps them organized, and allows them to achieve the level of focus necessary to succeed.
- They Know the Market. As part of their plan, effective real estate investors key in on specific markets that will best suit their goals. Knowing those markets inside and out is essential. They have to keep track of trends, consumer habits and preferences, mortgage rates, unemployment rates, indicators of emerging areas and neighborhoods, and more. They can get a handle on what’s happening in these markets currently – and plan for the future more effectively.
- They Keep Learning. You can’t learn everything about your market and stop there. Why? The market changes – all the time! Savvy investors make continuous education part of their strategy. Whether its evolutions in laws and regulations or shifts in spending trends, they are committed to ensuring their knowledge remains up to date so they can adapt and grow.
- They Understand the Risks. We’ve said it before, we’ll say it again (and, probably, again and again!): every investment carries with it some level of risk. Those who enjoy success in this area understand that investment is not a “get rich quick” scheme, and it does take hard work. They learn about the risks (financial, legal, and otherwise), and they adjust plans to mitigate those potential hazards.
- They Work with an Accountant. Where there is real estate investment, there are taxes! They make up a sizeable portion of your yearly expenses, and keeping up with tax laws can be complicated, time-consuming, and aggravating! When you compare the cost of hiring an accountant versus the savings you can realize, it’s a no-brainer.
- They Get Help. No one is an island, least of all investors. It is complex, and the most successful lean on the expertise and experience of a mentor, lawyer, or advisor. They can tackle challenges and problems with input from others – and they can learn from their mistakes so they don’t make the same ones.
- They Know How to Network. Along the same lines, effective investors know that they need a team on their side. It could be comprised of mentors, business partners, property managers, contractors, real estate brokers and agents, etc. The point is that they can draw on the experience of others, create connections that facilitate advantageous deals, and focus on continous learning.
Now’s a great time to start adopting these habits and ensuring your success rate as a real estate investor grows.