Real estate has always been one of the best investment decisions that can be made. The real estate investment market, like all markets, can be volatile, but if you strike while the iron is hot, it can be a lucrative financial decision.It, of course, takes quite a bit of know-how, good instincts, and a hawkish eye always kept out for the best opportunities. With a good deal of hard work and constant vigilance, real estate investing could be your primary source of income.

No one is an expert right out of the gate, though. There are benefits to this type of investment that can only be fleshed out with years of experience. The market can fluctuate wildly, often without warning or any reliable way of predicting the spikes or drops.

A seasoned investor may gain something of a sixth sense about these tempestuous variations in market conditions, but as a first-time investor it’s smart to go in with some background knowledge.

The following tips are in no way going to guarantee your success in this capricious market, but they are nevertheless important rules to keep in mind.

Invest your time before you invest your money.

While the market may be fickle, you shouldn’t be. It is imperative that you know what to look for, when to buy and when to sell. Having your “people” close by your side is preferable. You don’t have people? Find some. Find people that you can trust, who can inform you on the aspects of real estate in which you’re not an expert.

Study the market, learn everything you can about your local real estate trends.

Try keeping an eye on a few sample properties and gather what you can on the motions they go through, from listing to sale. Going into the real estate investment game blind and uneducated is not always a death wish, but 99% of the time, it will be.

When you’re getting your start, you may have to work round-the-clock to put your best foot forward once you finally decide to throw your hat in the ring.

Work on your salesmanship and personal skills.

Buying and selling houses is usually personal business for those you’re dealing with. Meeting with sellers, catering to buyers, working with contractors, and everything in between will rely on your ability to hold your own when it comes to negotiations and getting the sale.

Be cool under pressure. Sometimes things can get heated when it comes to big ticket items like real estate. Tensions run high and you aren’t always going to get along with someone on a personal level that you have to deal with throughout the process.

If you get into residential real estate purchases, then you’re getting involved with people’s lives. Families young and old will oftentimes work with those who cater to them and connect with them. Especially sellers; people want to sell their family home to people they know will be the best buyers for them.

You will need to learn to adapt to each new buyer and seller. Some people need to be finagled, others need to be finessed. Learn to read which is which and act accordingly.

“The right time” is rarely, if ever, perfect.

Anyone with their hand in the real estate investment game has a constant eye on the market, calculating the trends, following the fluctuations, ready to jump at that “perfect” opportunity that is sure to land them in the big league.

As a first-time investor, one can be a little trigger-shy, expecting that downtick to turn into a cascade of prices that will quickly turn into a spike, creating the opportunity for a quick turnaround. This will never happen.

If you continue to wait for that better opportunity, you could be waiting forever. Of course, buying high and selling low, it shouldn’t have to be said, is not what you want to be doing. If there is a favorable turn and you have money-in-hand, pulling the trigger might very well be the right thing to do.

Keep your eye on desirable property and just watch and wait. Not for the perfect opportunity, because, as I said, it’s not coming. Prices may drop after you buy, but you never know if someone had their eye on that same property and was about to snatch it before you did.

All this being said, don’t be too imprudent in your investment either. There is a “right” time and a “wrong” time, but there is no perfect time. Do your research, bide your time, and pull the trigger when you have cash-in-hand and the market swings your way.

Set your goals and incrementally increase your investment threshold.

Of course, for first-time investors, starting small is wise. Unless, of course, that opportunity that can’t be passed up comes along at the right time. If and when it doesn’t, getting your feet wet is advisable before you launch into large-scale investments.

Starting small allows you the opportunity to gauge whether or not the real estate market is a good fit for you. If it turns out you either don’t have a knack for it or it, in any other way, doesn’t seem like the right fit, you aren’t tied up in a large investment you don’t know what to do with.

However, once you’ve introduced yourself and get a feel for the trade, you want to increase your investments in a structured and well-thought out manner. Set your goals and have attainable milestones along the way, keeping your thoughts and investments focused on growing your returns.

Don’t expand beyond your capacity, but reaching for the next step is the best way to start seeing your hard work pay off. Larger, more desirable properties appreciate faster than their smaller, safer counterparts.

As you keep an eye on your properties and the market, you have to keep an eye on your finances. There is always risk when it comes to investing, but it shouldn’t be the risk of, “I might not be able to make payments on my own house.”

Keep your goals attainable and your desires in check. Getting the taste for real estate investing can be addictive, but make sure never to overestimate your rate of success or your own capital.

 

Doug Jacke is the Managing Director of North American Operations for Algoritz Technologies. He has more than twenty years of marketing and marketing technology experience helping organizations use technology to gain a competitive edge and fortify their bottom line.