In real estate, there is no shortcut to success. While it’s not quite rocket science, it does require a certain set of skills. Not only do you need to know the basics of the real estate market, but you also need to know how to deal with tenants, negotiate lease agreements, and manage your property in general. With these skills, you’ll be able to make a name for yourself as a reputable real estate investor, and make sure that the tenants, contractors, etc. that you work with trust and respect you.
And although you don’t need a degree in property management to succeed, you do need to sharpen your skills to make your property work. In this post, we’ll go over the key skills you need to develop to advance in real estate.
#1 Local Market Knowledge
You will never succeed if you don’t take the time to know your market. While you don’t have to live in your real estate market to know its ins and outs, you do need to have a firm grasp of how its market works. Bear in mind that the market will fluctuate and that there will be times when the demand for rental properties will dip. By understanding how the market behaves, you’ll be able to mitigate the risk and “tweak” your real estate investing strategy to make sure it always aligns with your goals.
By being familiar with the market, you’ll also be able to identify what your tenants want. What features are they looking for? What’s at the top of their checklist? Is it the crime rate, condition of the property, or other similar factors? Who are your tenants, anyway? Take the time to know what matters most to them in order to provide them with the tangible and intangible features that make your property more attractive.
You’ll have to communicate with tenants, contractors, and more every day. As a property owner, you will have to interact with tenants that are hard to deal with, contractors that point fingers when things go wrong, and so on.
Even if you haven’t invested in real estate yet, you’ll have to be in constant communication with your realtor to make sure that the property is the best one. If you’ve found the “perfect” property, you’ll have to negotiate your terms to get the right deal.
If you don’t know how to communicate, you put the future of your property at risk. You won’t be able to negotiate better terms. Your contractors won’t know what to do. Your tenants won’t be able to report repairs because they feel like they can’t talk to you. Working with a South Florida property management firm? You need to communicate your needs to them, too. With that said, communication skills are the key to your rental property’s success.
#3 Patience and Perseverance
You can’t turn a profit from your first day as a rental property owner. You will have to be patient and know that it takes time to set your investment in motion. Don’t worry, you will be able to see a return on your investment eventually, but until then, you will have to practice patience in every aspect.
Is your tenant late on their rent payments? Remember to be patient – there’s absolutely no need to evict them immediately. Is your rent lower than what you wanted it to be? Wait it out – property values will improve eventually.
However, that doesn’t mean you should always stick it out. Again, going back to number one, you need market knowledge to determine if you should wait out the market fluctuation, or if there’s no point in keeping your hopes up. That’s precisely why you should partner with a property management company. They can create a roadmap of your short-term and long-term goals, and help you decide what to do in case things go wrong.
Tenants are important assets, to say the least. You won’t be able to profit from your property without your tenants. But to find tenants, you need to be able to pinpoint their pain points. In other words, you need to answer why they should rent your property in particular. That’s why it’s important to know how to market your rental.
First, you need to identify where your property will most likely be seen by your potential tenants. Are they working with real estate agents or looking at the MLS? Then, ask yourself what features they would want. If you think they’d be interested in the pet-friendly features of the home, such as the fenced-in yard, entryway, etc. mention those in your rental listing.
Finally, you need to show your tenants why it’s the solution to their problems. If they tell you that safety is their priority, show them reports on the local crime rate. Your goal is to “sell” the property even though they’ll only be renting it.
#5 Technical Skills
Even if you’ve hired a professional to take care of the calculations, it wouldn’t hurt to be familiar with the basic concepts that you’ll inevitably face. If you’re unfamiliar with the cash flow, cap rate, price-to-rent ratio, and more, you won’t be able to understand why your real estate investment is (or isn’t) performing as well as you would’ve wanted. In addition, you won’t be able to determine if a particular property is profitable, if its market is too risky, and more. In other words, you’ll be very vulnerable.
Although your property management agent can take care of these things for you, you should take the time to sharpen your knowledge. All of the basic concepts you need to know are widely available online, anyway – all you need to do is to invest your time.
By now, you should know that it takes work to make your property work for you. With the right set of skills, you’ll be able to turn your property into a money-making asset in no time.
And don’t worry – if you need a hand, you can count on the experts at Luxury Property Care. As a full-spectrum property management company, we’re here to make sure that your real estate investment strategy aligns with your goals. We’ll be by your side as you navigate the market, and make sure that you avoid risks along the way.