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Successful executives in the real estate industry from Forbes Real Estate Council share firsthand tips & insights.
Investing in real estate is an increasingly popular way for entrepreneurial-minded individuals to diversify their portfolios and earn income. It’s not the easiest endeavor, and like any investment, it requires plenty of research and due diligence to make it work. But when done correctly, realestate can be an incredibly lucrative business opportunity.
If you’re new to the real estate market or are thinking about making your first investment, now is the time to get a jump on learning the latest industry trends. Members of the Forbes Real Estate Council each shared one critical piece of advice newbie investors should follow if they want to succeed in today’s market.
1. Automate Your Property Management
The biggest mental hurdle for new investors is dealing with the unknowns that come with owning and managing property. There has never been a better time to automate those tasks and truly run your business from anywhere. – Gino Zahnd, Cozy
2. Give Yourself A Safety Margin
We’ve been in a bull market for the last seven to eight years, and I would be extremely worried about getting into luxury housing. The key to succeeding in 2017 is to buy defensible assets that allow you a margin of safety, all the while preserving your operations throughout the downturn. I experienced 2008 firsthand and our assessment of risk changed forever. – André Bueno, The BM Group
3. Find The Right Locations
Get in front of sellers in the best locations. This is the key to everything and is what our business is built on. – Mathew Roth, Hawthorn Builders
4. Get In On The Rental Market
Consider investing in the rental industry for yield, not necessarily capital returns. There is a huge generational shift towards renting among millennials. – Anthemos Georgiades, Zumper
5. Educate Yourself On Local Market Nuances
Don’t buy in a “new to you” market based on what you know back home. Real estate is local, and local knowledge is critical with regional nuances. Find someone who not only has worked your target 10 years or more full time, but charts personal experience as an investor. The best guesses of those who have personally ridden the local waves of victories and defeats are worth 100 non-local pundits. – Ruth Marlene Graham, Tropics Real Estate
6. Watch Your Cash Flow
Focus on monthly cash flow, not equity gains. To become a real estate investor is to become a business owner. And as a business owner, it is your task to create distance between the money flowing into your business every month, and the expenses necessary to keep that business sustainable and growing. – Ali Jamal, Stablegold Hospitality
7. Consider Experience, Connection and Community
There’s never been a better time for small real estateinvestors to compete with the big guys because the concept of “location, location, location” is being replaced with “experience, connection and community.” With some creativity and love, class-C assets can be converted into ideal properties for millennial-minded companies and hipsters who appreciate buildings with history and character. – Christopher Kelly, Convene
8. Study Your Geography
Thoroughly understand the geography of the market(s) you decide to target, down to the street addresses. Every neighborhood has a cusp; although a comparable unit/property may look close on a map, you could be stepping into a completely new territory. – Ryan Acone, ROCK Development