Often times, people tend to get confused between being a landlord and a real estate investor.
Let’s get this straight from the start: being a landlord does not necessarily mean that you are a real estate investor as the answers to how to be a real estate investor and how to invest in real estate are wider than owning a property or renting out a room. In fact, being a real estate investor does not mean that you have to be a landlord.
This blog is dedicated to giving you hints and tips on how to become a real estate investor and real estate investing for beginners.
Focus on Smart Decision-Making
Unlike landlords who focus on lease negotiations and documentation, property marketing, monthly rent collection, insurance coordination and repairs, etc. a real estate investor concentrates on the ultimate goal which is growing the real estate business and how to make money in real estate with a constant generation of positive cash flow.
Therefore, to be a real estate investor, you should not waste your time on specific details related to the process of renting your property and focus on starting a real estate business. Instead of worrying about repairing plumbing on a Saturday afternoon, a real estate investor focuses on knowledge, research and smart decision-making as these things make you work smarter not harder.
To do this, you need to use professional property management and hire a property management company to market your properties, negotiate and communicate with tenants, maintain the property and oversee the properties on your behalf. It is true that you need to pay for these companies but in return, you are saving yourself from all the hustle and bustle that a landlord deals with and giving yourself enough time to grow your business, expand it and concentrate on the profit-making process.
Read “Professional Property Management: Pros and Cons“ to get an insight into the advantages and disadvantages of using property management companies.
Expand Your Real Estate Investment Strategies
Real estate investing is a huge industry that is full of multiple opportunities that you better take advantage of. A landlord usually limits his/her real estate business on rental properties, particularly traditional rentals. However, a real estate investor tries to expand his/her real estate investment strategies and attract different types of tenants.
There are plenty of property types for rentals including Airbnb rentals and coliving buildings. Other real estate investment strategies include: buy and holds, fix and flips, real estate wholesaling and commercials. However, you need to choose the optimal rental strategy that suits your budget, plans, and goals. This does not mean you cannot invest with more than one type of real estate investment strategies at once. You just need to make sure that you have enough time, knowledge and resources to work on them.
“Top Six Real Estate Investment Strategies“ gives you a detailed guideline on real estate investment strategies, so make sure to read it if interested.
Use Real Estate Investment Tools
Starting real estate investment requires knowledge about real estate investment tools that organize the work for investors, facilitate investments and make life much easier for a real estate investor. Since knowledge and education are the foundation of everything, it is important to have educational real estate investment tools such as books and guides. You are lucky enough to live in the 21st century where you can find all you need to know about the real estate investment world from the comfort of your own house. The internet has plenty of real estate investment websites that offer tools and knowledge for beginner and seasoned investors alike.
Mashvisor is a great platform that provides all you need to know about real estate investment through its priceless blogs. It also works as a tool to search for properties and data about them such as cash flow, return on investment and traditional and Airbnb occupancy rate. Furthermore, it offers an interactive investment property calculator, allowing you to estimate costs and profits. Make sure to sign up for Mashvisor to get all that and more.
Do you need to know more about the tools each real estate investor must have and use? Check out “8 Must-Have Real Estate Investment Tools.”
Educate Yourself About Comparative Market Analysis
Knowledge about the real estate market is the key to success for each real estate investor. Knowledge about the housing market and its fluctuations allows you to better understand how to buy investment property and also professionally determine the best locations to buy properties and generate positive cash flow.
As a real estate investor, you should thoroughly educate yourself about comparative market analysis (CMA), also known as real estate market analysis. It is a process in which real estate investors or real estate agents compare a certain investment property to other recently sold ones in the same area/location. In real estate investing, this process helps to identify or determine the market value of the compared investment property which helps you price it and sell it as fast or as slow as you want. It also gives you insights into buyers’ and sellers’ behaviors in the real estate investment market and how they change and affect properties’ prices.
Consider Investing Remotely
Unlike landlords who, for the most part, rent out properties they own or used to own, real estate investors concentrate on where to invest in real estate and finding the best locations for a lucrative investment. Do not be intimidated to invest in properties located remotely as you need to get to a point where you can expand your investment and grow your business. Keep in mind that you live in the 21st century where everything works remotely so do not think that by investing in remote locations, you won’t have control over your properties. Technology gives you all tools you need to manage your properties in any part of the world. In order to be a real estate investor, always look for locations with a potential for success for a real estate investment.
Bottom Line
What differentiates a landlord from a real estate investor is the fact that landlords, for the most part, have some sort of sentimental attachments to their properties. That is not the case with real estate investors as they look at their properties as a business that needs to grow and generate money. Keep in mind that a real estate investor invests money to have a successful business and make money.