7 expert tips for a successful real estate investment

Get advice from a real estate expert on how to handle the different aspects of real estate investing to increase your chances of success.

Negotiation is an invaluable life skill that isn’t taught in schools, but when it comes to property, learning how to deal with a wide range of industry experts can be crucial.

As an individual investor, you are limited by your personal levels of skill and experience, which makes dealing with professionals who deal exclusively with real estate on a daily basis a challenge. But by doing your research, being comfortable with a certain degree of uncertainty, and negotiating with confidence, you can stand the odds in your favor.

Here are my tips for a successful real estate investment.

1. Find the right mortgage broker

The first step is to make sure you have the right funding. This means that you will be armed with the right information about your loan options and that you will be in a better position to negotiate. Also, with the help of a mortgage broker, you may be able to secure more financing than you expected, allowing you to consider better properties or more flexible offers.

However, finding the right mortgage broker is crucial. They should be by your side – there to help you be successful and build long term wealth; so you have to think smart and make that relationship lasting – it works both ways.

2. Buy off plan

When buying off plan for investment purposes, it is important to focus on the numbers and not get emotionally attached to individual property, so that you can be open to opportunities.

For example, during the COVID-19 crisis, many buyers who bought out the plan strayed from their contractual obligations and did not settle, meaning developers unexpectedly found themselves with completed properties at to sell. Savvy investors who knew where to look and how to trade found themselves able to access some (if not all) of the previous buyer’s deposit. Not all developers are receptive to this, but ultimately they are looking to sell their projects off plan or on completion, so there were opportunities to secure large assets.

3. Find a builder

If there is one sector where everyone has an opinion, it is the building sector. Due diligence is important, and one of the best things you can do is inspect their previous work. Ask to see a project they built five or 10 years ago. See how it stands the test of time and if it’s structurally and aesthetically sound. Don’t be afraid to knock on the door and talk to whoever lives there. Ask if there are any issues – most people will be happy to tell you if there are any. If so, go back to the builder and see how they respond – their answer can help you make up your mind.

4. Become a developer

Real estate developments are at the complex end of the bargaining scale. Regardless of the size of the development, success depends on the skills, knowledge and experience needed to identify, negotiate and secure a suitable site. You also need time and patience to liaise with a range of trades, departments and professional services, constantly dealing with people who don’t have the interest you have, and with the potential to extend. the process in terms of time and money.

5. Commercial property

A key difference with commercial properties (as opposed to residential properties) is that you can lock in automatic rent increases from year to year. But it depends on market conditions as to who has the upper hand in the negotiations – you may find yourself choosing between renting out the property on terms favorable to the tenant or leaving it in the market to meet the asking price. You might be better off looking for space leased from small to medium-sized businesses, as top tenants are armed with agents, staff, and consultants who have the resources to negotiate hard for a good deal.

6. Property management

It’s worth the time to invest the time in finding the right property manager, but keep in mind that while you can find cheap rates, you also get what you pay for. And if you have half a million dollars in assets, why would you want to shop based on fees alone? Finding a great team with an experienced property manager is worth the effort to seek out and keep for the long term.

7. Non-market opportunities

Like it or not, many of the best real estate deals are off-market, which means they never make it to real estate websites. Developers sell to other developers, and agents sell directly to buyers they already know. This saves the supplier the time and cost of expensive marketing campaigns.

So, no matter what level of negotiation skill you have, you will never have access to these opportunities. This is where you need a trusted lawyer or professional mentor in your network. They should have the contacts, networks, and negotiating power to negotiate deals that you cannot reach on your own.

It’s also good not to have to go it alone! Imagine how much more successful you would be if you took the time to build a team of seasoned real estate professionals, all working to help you optimize your bottom line. You will have your financial resources in place, you will be able to quickly find properties that match your strategy, and you will be able to negotiate effectively with suppliers for the best terms and inclusions.

You and your network will be able to achieve things that are almost impossible to achieve by working in isolation.

Cover image source: Oleksii Synelnykov / Shutterstock.com

About Luke Harris

Luke Harris is the CEO of The Property Mentors. He has over two decades of personal experience in business, real estate and investing. He is the co-author of Let’s Get Real and the author of Property Fit.

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