3 Steps To Successfully Investing In Real Estate

Must Have Advice For When You Invest in Real Estate

When I started to invest in Real Estate and created what eventually became my landlord business, I had a clear goal. That was to own enough property that I could generate an income to replace my job, to create a nest egg that would continue to increase in value over time and to get to a position where I had more free time for my family.

The problem was, I knew where I wanted to end up, I just hadn’t taken the time to create a map. Over time, I realized that map would have saved me many trips I took down the wrong fork of the road, often forcing me to double back and costing me extra time and perhaps even allow me to travel with different companions along the way.

While there are great things to be said about doing something on your own (there is a certain positive vibe to being able to say someone is self made), the reality is we need people to help us along the way if we want to get there quicker and to help us avoid some wrong and potentially expensive turns.

This leads me to three steps I learned along the way, that helped me create a successful landlord business and to successfully invest in Real Estate and I feel any beginning landlord must be aware of to help them succeed as quickly as possible.

Step 1, Create a Network

To help you succeed the quickest, you need a network of friends, contractors, supporters and professionals to help you get there. By creating a trusted network you have people coming along on your journey who you can go to for advice, support and even guidance. This tip alone can streamline years off your journey.

Our network includes lawyers, mortgage brokers, realtors, accountants, contractors and fellow landlords we have met over the years, the majority of these people are also in the landlord business. This group of knowledgeable professionals gives us insights and resources to get questions answered quickly and accurately and has saved us tens of thousands of dollars over the years along with shaving years off our progress.

Step 2, Don’t Stop Learning

To stay on top of your business as a landlord you need to continually educate yourself about being a landlord, about local laws and legislation regarding being a landlord and owning Real Estate, about mortgages and finances and even requires and understanding of the basics of the local economics.

Training in landlord and tenant legislation can help you deal with potential tenant problems easier and gives you confidence in your decisions. Understanding the basics of Real Estate transactions and local bylaws pertaining to Real Estate can help you avoid costly mistakes such as purchasing in improperly zoned areas. Knowing the basics of finances and mortgages can help you make better business decisions and make planning for the future easier. Having an understanding of the basics of economics can give you an edge when it comes to determining what areas may be better suited for additional properties and it can make you aware of trends others don’t see until it’s too late.

Some of these areas appear to remain quite static, but if you don’t pay attention and keep up, suddenly rules can change on you. Whether it’s changes in rules for secondary suites, a huge new employer coming to your area creating jobs or even changes in mortgage requirements, they all affect you either directly or indirectly, so stay aware of what’s happening. Once you think you know it all, you start falling behind quickly, so never stop getting educated.

Step 3, Build Up Reserves

No matter how well you plan or who well things appear, you never know when the wheels will fall off. The big example of this currently is to look back at the worldwide recession that recently hit us. For many individuals, it wiped them completely out, for those that had reserves built up and extra cash to cover them during the toughest times, it gave them an extra life (or two) to survive and then to prosper as the environment started turning around.

As tempting as it may be to pull all the profits out and buy a shiny new sports car or to pump them directly back into a new property, take a few minutes and make sure you have adequate reserves in case the situation changes. This single step can often be the biggest difference between long term success and quick failure.

Obviously there is much more than just these three steps to successfully invest in Real Estate, but if you start by paying attention to these areas, create a network of trusted friends and advisors, don’t stop learning about the landlord business and build up your reserves, you will find your path to being a successful landlord a much straighter and less arduous affair.