We all know that get-rich-quick schemes rarely pan out, but somehow, we still hope that we’re the exception to the rule. Newbie investors often get tricked into thinking that the real estate market is the best way to turn a profit quickly. They get so excited that their emotions run rampant, and they end up making rushed decisions that ruin their profit potential.
As a real estate investor, one emotion you must master is patience. Rushing into the real estate scene will only yield greater mistakes and lost revenue in the long run. In the housing market, good things really do happen to those who wait, but getting rich quick isn’t one of them.
The true key to becoming a real estate mogul who can turn profits on just about any property, whether through renting or selling, is learning to be patient with the market, and rolling with the twists and turns as they come. Just keep in mind that the best things in life take time, and if you’re willing to slow down just a little and not get frustrated by the hiccups, you’ll soon find out why so many people say that real estate is their most rewarding investment.
Finding the Money
For most first-time investors, lack of funding is the biggest cause for wait. It takes a good amount of money to put a down payment on a house. Depending on the current state of the market, it could cost you as much as 20 percent, which means that a home costing $200,000 will require a $40,000 down payment. Unless a distant relative dies and leaves you a fortune, that kind of cash doesn’t accumulate overnight.
Too many young investors buy into the idea that you can take out a loan from one bank to cover the down payment for the mortgage. Not only is the approval process more rigorous than most people realize, but it can also lead to some major financial challenges down the road. When investing in real estate, raising the money before jumping in headfirst is the best way to find success. You don’t always know that your investment is going to triumph, and putting that initial chunk of hard-earned change into the investment can make all the difference in the long run.
Search the Market Carefully
Once you finally have the necessary money to make your purchase, it’s important to search the market carefully before choosing a home to purchase. You aren’t picking out furniture that can be returned easily if there’s a problem or you don’t like it as much as you thought. When you put down the money for your investment, you’re committed, and there’s no going back.
Don’t snap up the first opportunity that you encounter. While you’re saving your money, keep an eye on property prices and the current state of the market. This knowledge will prepare you when it comes time to make a purchase. Your preparation can take several months, or even a year, but the delay is entirely worth it. The more research you’ve done beforehand, and the more searching for the perfect property you do, the more likely the property will be a good investment for you.
Investing in property is all about finding good deals, not rushed decision-making. The buyer has more negotiation power than you might think, if they’ve done their homework and provided proper evidence as to why the asking price should be reduced. Before putting in an offer, wait for bids from contractors to come in and home inspections to be completed, and see that it meets city ordinances. All of these factors can be used to leverage a great price on the property.
Impatience Leads to Mistakes
Perhaps the most important thing to remember about real estate investments is that impatience will almost always lead to major mistakes. Sometimes, those mistakes will cause you to lose a little revenue, while other times, they’ll be big enough that you’ll want to count your losses, and get out. In real estate, you can’t rush a deal and hope for the best. Everything must be completed in a timely manner and be done right if you want to see optimum profit. It would be such a shame to rush a deal and lose out on revenue that you could have seen if you’d just waited a few more weeks.
Consistency and Persistence Is Key
Patience in real estate doesn’t mean that you get to sit around and wait for the end result. If you want your investment to have numerous buyers or renters, you must put forth the effort. You can’t just put up a few signs with your name, number, and property information, and hope that your phone will be ringing off the hook. It takes a constant, persistent effort to garner enough attention for people to look at your investment.
Phone calls, email messages, advertisements, social marketing, and other techniques are the best ways to see faster, more profitable turnover. It’s important to note that the first several weeks will likely see little interaction from homebuyers or even renters. Only with consistent attention to detail and marketing will your property get the momentum that it needs to bring in a major sale.
Don’t Lose Profits From Impatience
Too many investors operate under the assumption that the real estate market is so shaky that they need to take the first offer that they get. This is absolutely false. If you’re not careful, you can leave a lot of money on the table, simply because you were too impatient to wait for the right offer.
Often, when entering negotiations to purchase a house or to rent out a property, even the most experienced investors can get nervous that the interested party will abandon the transaction simply because the seller is asking too much. As a result, the seller concedes prematurely and ends up losing out on more money than they needed to. This is one mistake that’s all too easy to make, but with a little patience, it can be avoided entirely.
Find the Right Renters
When the property is finally ready to rent, take your time during the screening process. You’ve put a lot of money into this investment, and all it takes is one bad renter who doesn’t pay for it to go down the drain. Perform your due diligence here, and screen the tenant properly to ensure that you’ll begin seeing immediate returns on your investment.
Call in the Experts at Green Residential
Once you have everything in place for renting out your property and receiving a great return, you can take a break from being patient by calling in the property managers at Green Residential. We are dedicated to delivering top-quality, speedy service as we help you to manage the property and take care of all your needs in a timely, affordable manner. For more information about what Green Residential can do for you, contact us today!