The Key Characteristics of a Successful Real Estate Investor
Have you ever wondered why some real estate investors become headline news for their achievements while others try it once or twice but never recognize the true value in real estate? Real estate has such lucrative profit potential that it’s hard not to realize at least some gains. But if you’re more interested in true, long-lasting success, you might want to see how you measure up to these key characteristics of a successful real estate investor.
Passion For Real Estate
Steve Jobs said, “People with passion can change the world for the better.” He understood that passion is needed in order to sustain interest over the rough patches, through the boring bits, through the tedium. Without passion, people tend to give up. Think about it. If you don’t really care about something, then when things get tough it’s easier to walk away. Passion is the fuel that drives action and persistence. Real estate investing isn’t always easy. Those who are really successful at it have the underlying passion to continue looking for ways to make it work.
Ability to Detach Emotionally
Real estate is a funny thing. A lot of people “fall in love” with a particular property. They find a “dream” home and do everything in their power to acquire it, even when the economics of it are not in their favor. Or they want to buy an investment property because of what it means to them. They might have always dreamed of owning a property on a particular street, in a certain neighborhood. That’s not how successful real estate investors go about it. They’re able to set emotions aside and look at a potential investment as just that; an inanimate property that may or may not yield a good return, based on hard data. This is essential—if not the most important— characteristic of a successful real estate investor.
No matter what you may have read or heard about how the most successful people in real estate operate, integrity always wins out. In real estate, your reputation is everything. The way you talk to people, the way you handle disputes, the way you pay your bills – it all impacts how successful you’ll be in real estate and any other endeavor, for that matter. People want to do business with people they can trust, respect and rely on. Be that kind of person and you’ll have a better chance at succeeding. You’ll be more likely to be able to get funding, support, and cooperation when you need it.
Speaking of support, the most successful people in real estate are supported by teams of people who provide certain skill sets. You’ll need a good team behind you to give you honest quotes on renovations, to make repairs, to handle tenants, to find economically viable properties and so on. The team mentality means you know you couldn’t do it alone, and you value and fairly compensate those who assist you in your goals.
Understanding of Economics
You’ll need to understand how money works to make it in the business of real estate investing. Knowing how to manage your money is a key ingredient in understanding economics. The most successful real estate investors know when to invest and when to save, on top of everything else. You’ll also need to know how to calculate return on investment, cash flow potential, cap rate and more. Even if you just decide to go into private money lending, you’ll still need to know the difference between a good interest rate of double digits and a modest single-digit return that you might get from a CD investment.
You’ll interact with a variety of people in your real estate dealings. You’ll communicate with other landlords, other investors, bankers, property managers, repairmen, tenants, town council members, property owners and more. Your social skills need to be sharply honed. This includes things like:
- making eye contact
- good listening skills
- ability to negotiate
- willingness to concede when necessary
- interviewing skills
- ability to judge character
- writing skills
- good sense of humor
- not taking yourself too seriously
Some of the most successful real estate people never went to college. Others can boast degrees from Wharton or Harvard business schools. You don’t need to have a genius I.Q. or have a piece of paper from a university to make a fortune in real estate. But you do need basic knowledge about core principles in real estate. Real estate transactions can be complex. Some of the most successful ones involve strategic or creative concepts that rely on a solid foundation of real estate knowledge in order to work. If you don’t already possess this key characteristic of a successful real estate investor, take the time to educate yourself before you go any further.
There are very good, very genuine reasons why some people make it big in real estate and others have only modest success. These key characteristics of successful investors can’t be overlooked. They’re essential to building a solid portfolio of real estate investments that will bring you and your family lasting monetary and emotional fulfillment. American Real Estate Investments is committed to providing interested investors several opportunities to get into real estate investing, including private money lending, turnkey rentals, and vacation property rentals. Please contact us to learn more.