There is no such thing as a risk-free investment. But as far as sound investments go, real estate is as good a choice as any. The stock market may be the go-to investment for many, but top real estate investors see rental properties as a more favorable alternative because of benefits like better returns, tax perks and leverage.
“Real estate investors get paid five ways simultaneously,” says Get Rich Education Founder and real estate investor Keith Weinhold. “Stocks only pay you on way, sometimes two.”
How Top Real Estate Investors Get Ahead
It takes more than just a checkbook to make a profit and succeed as a real estate investor, however. It also takes discipline, research, and good habits that are put into practice every time you make a real estate investment.
The good news is you don’t have to reinvent the proverbial real estate investor wheel to be successful. Many investors have succeeded in this field. And if you follow their patterns, there is no reason you cannot find your own success. Heck, maybe one day people will study about you to find out what made you a successful real estate investor!
Here are just a few successful habits of top real estate investors.
1) Continuing Education
Top real estate investors understand the importance of a good education. They don’t reach the pinnacle of success from learning by osmosis. Investors understand that the market changes often and they need to keep up with the changes, or else be left behind.
If you are just getting into real estate investing or if you already own a dozen properties, it’s important to always be a student of the industry. Here are some great ways to continue learning:
- Read books written by other real estate investors.
- Stay up-to-date on industry related news.
- Listen to podcasts about small business or real estate.
- Attend local real estate seminars and conferences.
Figure out the way that you best absorb new information, and start learning.
Weinhold recommends books like “Rich Dad Poor Dad” by Robert Kiyosaki, “Loopholes of Real Estate” by Garrett Sutton, and his own Amazon best-selling “7 Money Myths That Are Killing Your Wealth Potential” as good educational resources for new investors.
2) Build A Network
Rarely is success obtained when flying solo. Even top real estate investors have someone to reach out to for advice, to review a potential deal, or to discuss what’s currently going on in the market. As you build your portfolio, build your network too. Reach out real estate investors who you want to emulate. It could be as simple as asking to meet for coffee or doing a Skype call.
You’ll become a better real estate investor when you are in the company of people who are better than you. Plus, the bigger your network, the more people you have to give you a head’s up about potential investment opportunities.
3) Purchase Wisely
What makes someone a top real estate investor? Step one is to own properties that earn money, of course. In a best-case scenario, money is made right at the purchase of a rental property. Getting a good deal in the beginning means instant equity in the property. This is the best way to start an investment – with money already made.
Top real estate investors profit off their investments because they don’t overpay in the beginning and they aren’t bound to any property if the numbers don’t make sense. Real estate investors know there are plenty of other investment opportunities available to go after. They also understand the benefits of leverage – when an investor uses borrowed money to increase the odds of a financial gain – and often use it to their advantage.
When these top real estate investors use leverage, also known as “other people’s money,” to purchase a property, they benefit in a couple of ways:
- They increase their ability to buy a more expensive piece of real estate.
- The cash they don’t spend on the deal can be used towards additional properties.
“Maximize the use of leverage,” Weinhold says. “Though I invest primarily for cash flow, long-term, buy-and-hold investors often get the greatest returns from leveraged appreciation.”
4) Purchase Often
To make money investing in real estate, it takes more than just one rental property. Top real estate investors have portfolios with tens or even hundreds of properties. Each property they own is just another source of monthly revenue. Besides the increased cash flow that comes with owning multiple properties, investors also achieve more flexibility and peace of mind. For example, if one rental property is vacant, it doesn’t hurt the investor as much because they have other income streams from their portfolio to keep things afloat until the property is leased.
If you can’t afford to buy multiple properties at once, that’s OK. Start with one, build up your cash flow, and use the proceeds to buy your next property. Continue with this strategy until you own a large portfolio of properties.
Are You A Top Real Estate Investor?
A common expression used to describe real estate investing is “passive income,” but most of it is not passive (unless you consider turnkey investing). Top real estate investors got to where they are because they did their homework, they kept learning, they built their network, and they kept their eyes own for their next opportunity. If you follow their habits, chances are you could wind up a top real estate investor, too.
“Avoid postponing,” Weinhold says. “In life, ‘go and do’ gets you farther than ‘wait and see.’”
Do you want to invest where the top real estate investors are putting their money? Download our free guide of Tips For Buying in a Hot Market.
This article is for informational purposes only. For information specific to your investment situation, consult with a qualified tax adviser, CPA, financial planner or investment manager.