Investing in success - 10 habits of successful property investors

Investment is a journey through fluctuating markets, rife competition, trends, regulations, and emerging opportunities. Cultivating good habits can significantly boost the chances of success and maximise returns.

Here are 10 habits of successful real estate investors that can serve as a roadmap to prosperity.

Do your market research

Successful property investors understand the importance of thorough market research. They analyse trends, demographics, economic indicators, and local regulations to identify lucrative investment opportunities and mitigate risks. It's important to stay ahead of current trends including the way consumers are spending, changing rates, fluctuating economies and what is happening in local geographies. Knowing the market essentially leads to the greatest growth potential.

Develop and stick to a long-term vision and strategy

Instead of chasing short-term gains, successful investors have a long-term vision and strategy. They focus on building sustainable wealth through strategic acquisitions, portfolio diversification, and value appreciation over time. It's important from the outset to take the time to define investment goals, both short-term and long-term, and then to break those goals down into actionable steps. Creating a timeline and sticking to it, as well as regularly assessing progress means that strategies can be adjusted if necessary.

Have solid investment exit strategies

A large part of an investment strategy is having reasonable exit strategies in place. Whether it's selling, refinancing, or leasing, it is important to anticipate various scenarios and have contingency plans to adapt to changing market conditions. Savvy property investors anticipate and understand the risks-not only in terms of real estate deals but also the legal implications involved and adjust their businesses to reduce those risks.

Buy on facts, not emotion

Emotions have no place in investing in property. Successful investors make decisions based on data, analysis, and due diligence rather than impulsively making hasty purchases based on a whim. They stick to their investment criteria and remain disciplined in their approach.

Never stop networking

Building a strong network is crucial for success in real estate investing. To be sustainably successful, they must actively network with other industry professionals, including agents, brokers, lenders, and fellow investors, to uncover opportunities, share knowledge, and forge valuable partnerships.

Keep happy partners

Investing often involves collaboration with various stakeholders, such as partners, tenants, contractors, and lenders. Investors who prioritise maintaining positive relationships with these partners are able to leverage the long-term benefits that come with relationship building. By communicating effectively, delivering on promises, and resolving conflicts amicably, all parties can consistently work towards achieving the same goals and reaping the rewards that come with them. Challenges will happen and you can then work through them with good partners.

Understand the risk landscape

Investing in property inherently involves risks, but successful investors understand how to assess and manage them effectively. They conduct thorough risk assessments, diversify their portfolios, and implement risk mitigation strategies to protect their investments. Being prepared for risk gives you the opportunity to ride through difficulty and into positive returns.

Chase those referrals

Satisfied tenants, partners, and clients can be a valuable source of referrals in real estate investing. By prioritising and delivering exceptional service and experiences, investors can encourage more and more referrals, which can lead to new opportunities and growth.

Location over convenience

It is crucial to prioritise location over convenience when selecting properties. Savvy investors recognise that location plays a pivotal role in property value, rental demand, and long-term appreciation potential. They conduct thorough research to identify prime locations with strong growth prospects.

There will be failures, don't let them get you down

Property investing is not without its setbacks, but successful investors have the ability to turn unfavourable outcomes into learning opportunities. Instead of dwelling on mistakes, they analyse what went wrong, adapt their strategies accordingly, and use those experiences to become more resilient and successful in the future.

The journey to success in real estate investing is requires more than just luck, charm or intuition. It rather hinges on entrenching a set of disciplined habits that should always form the cornerstone of any investment strategy. While the investment landscape may be unpredictable, the approach to navigating it should never be.

Cash flow: Unlike many other investments, real estate has the ability to generate cash flow, either in the form of profit once you've paid off your mortgage or as rental income, whether from an income-producing flatlet on your primary residence or from separate properties. Cash flow from real estate is also far more stable and predictable than most other businesses.

Ability to appreciate: Generally, the value of properties appreciates with time which means that the longer you've owned property, the more it will be worth, making it the ideal nest egg.

Tax concessions: As a real estate operator, you're able to deduct items such as interest and maintenance over time as business write-offs.

It gives you leverage: By consistently servicing the mortgage, you have the opportunity to tap the equity that you have built up and if you own multiple properties or buildings with several units under one roof, you have the option to cash out at any time.

Loan pay-down: When you buy a property with a mortgage in order to rent it out, your tenant is paying at least part of the monthly bond repayment, which means your property is essentially a savings account that grows automatically without you investing very much more - if anything at all.

Hedge against inflation: When inflation increases, so does your rental income and often your property value as well. In other words, when the cost of living goes up, so does your cash flow.

Extract From Property 24