Real estate investment can be one of the most lucrative fields out there. Investors can make passive income from rents while building up capital gains over time. For some, this is a nice influx of additional cash. For others, it may mean that they don’t have to work another day in their lives.
Many people want to get into real estate. As it happens, this is attainable for most people – as long as the dedication and effort are there. Success in real estate requires a combination of knowledge and willpower.
Here are some important tips for beginners and seasoned real estate investors alike.
Many real estate enthusiasts, especially seasoned investors, see seminars as a waste of money. They think that you go to these gatherings to listen to someone talk, and end up learning less than your money’s worth.
But that’s not how it is.
You can gain a lot of knowledge at a good seminar. You can even learn things outside the field of real estate. You should never underestimate the knowledge that these seminars can give you.
Furthermore, it isn’t just a company or a person talking at you. In most cases, the people who hold these seminars are real-life real estate investors who have much to share with you. For instance, Dymphna Boholt is one of the best real estate seminar organizers in Australia and the world.
And a seminar isn’t just about attaining knowledge. Yes, you can learn a lot, but it’s also about networking. Think about it. You’ll be in a room with your peers in property investing. Some of them will have more experience than you, others may know less. One thing’s for sure, you can make a lot of useful contacts. As the saying goes, sometimes it’s not what you know, it’s who you know.
It can be a good idea to question everything and not accept something as fact just because someone said so. However, you shouldn’t be too sceptical either. If you doubt everything by default, you’re unlikely to learn very much.
The thing is, attaining knowledge is all about diversity. If you’re only learning about things that are easy to understand and within your comfort zone, you aren’t learning a whole lot. Sometimes, learning about things you don’t believe in can deepen your knowledge.
For example, you may not be open to using astrology in property investment, which is absolutely fine. However, looking into the connection between real estate and astrology may teach you some unexpected things.
For example, you may learn that some investors pick market highs and lows according to the full moon. This may not be something you believe in personally, but it will have an effect if enough people get in or out of the market accordingly. Investors who consult astrology are still part of the market.
Get-rich-quick schemes are usually untrustworthy. As a rule of thumb, if something sounds too good to be true, it probably is. This is especially true for real estate investing. You can’t expect to buy a property and sell it for a lot more money in a matter of days.
You’re going to need a strategy. It may be as simple as timing the market or waiting for the right moment to strike.
This moment probably won’t come soon. For some properties, it may be never. The point is that property investment is a long game.
This is why you shouldn’t drop everything you’re doing to get into property investment. Quitting your day job right away isn’t recommended. You still need something to keep you afloat until you become a sustainable property investor. In the beginning, you might be doing a lot of work for little to no money.
But once you generate a passive income and build up some capital gains, you’ll likely think it was worthwhile.
Property investing isn’t like owning a business.
Your business may generate $500,000 in profit over a certain period of time. In real estate, the equivalent would be adding $500,000 of equity to your portfolio.
The first major difference between the two is that profit is subject to taxes. But equity isn’t – unless you cash out. That means that you can compound your profits.
Another important difference is that in business you may end up with minus $500,000 in profits (or $500,000 in losses). That’s a business that haemorrhages money. But in real estate, the maximum you can lose is your initial investment.
This doesn’t mean that you should neglect your cash flow when investing in real estate. It’s at least as vital as business cash flow. Cash flow is your safety net. You can lose everything if you’re always in the red and not sitting on a pile of money.
Nothing is “stupid” in the world of real estate investing. You can only learn good and bad lessons. The attainment of knowledge is the foundation of real estate success, whether you do it by going to seminars or researching on your own.
Real estate isn’t equivalent to running a business in terms of earning money. You have to be prepared to play the waiting game. But the end results are worth it.