With the surge of home prices increasing at what most would call an alarming rate, many aspiring real estate investors are finding it difficult to secure and investment property. There are still investment properties out there so how are some investors making it work?
- They know what they want.
This sounds extremely simple. It is very easy to get distracted by each shiny new investment property that comes up. This is why successful investors stay laser focused by knowing exactly what they want.
They know what type of property will work for them and if they are looking to have landlord responsibilities they know what type of tenant they can handle.
Now quick tip here, you cannot set preferences for tenants in your properties. This would constitute a form of discrimination. What is meant by this is that if you realize that you would not be well suited to care for student tenants, don’t look to buy properties that are boarding style properties and are in very close proximity to graduate schools. Similarly, if you believe you can handle caring for tenants with families then don’t look for homes far from local elementary or secondary schools and local amenities.
- Why do they want this type of investment property?
A good investment portfolio in general will be diversified, in real estate it should be the same. Understand why you need it. Is it for long term or short term? Do you want more focus on cash flow, do you want a quick return on your investment? Etc.
By getting answers to these types of questions, Savvy investors can better narrow in on the types of properties that will work for them.
- Look where no one else is looking
The key word here is yet. Savvy investors tend to avoid overly popular areas where intense bidding wars are taking place. These types of situations can decrease profit margins and expends a lot of energy and time from the investor.
Key tip on this point is to anticipate trends. Look for areas with growing populations, established or newly established plazas with major box stores, new transportation routes, new allowances for new development projects just to name a few.
- They are ready for fast action
How do they do this? Don’t investments require careful consideration? Yes of course, however Savvy investors know how to leverage! They have a strong team of professionals to give them accurate and relevant advice. Financial advisors, Real estate agents, Property Managers, Lawyers are essential to getting investors information in real time. By consulting with these professional and others they have already identified their criteria and can easily recognize real opportunity and snatch it when it comes up.
- They are resilient
Yes the market is “hot”, not just in the GTA but on the surrounding areas as well. This is not a reason to give up after a couple months of searching. Depending on the type of property you are looking for and the area you are searching in you may have to turn away from several of them before finding one that works. Investors know it is a numbers game and therefore avoid getting caught up in emotions. They also avoid burning out by utilizing tip #4.
The first tip is crucial to making your investment process successful. When I first started investing I found that creating a proper investors profile brought clarity and results. Now all my investors start out with this as well.
To help you along I have included a link so that you can fill out your very own investor’s profile. Once you complete it you can choose to send it to me and when you do I will respond with a list of suitable types of properties and possible locations for you to consider based on your answers.
“When you know better, you do better.”
- Maya Angelou