Real Estate Success Skills
You’ve probably heard the phrase, “Knowledge is power.” It’s a true statement, especially when it comes to investing in real estate. But precisely what skills and knowledge are required to succeed in real estate investing?
If you’re new to being an REI (real estate investor), or even if you’ve been doing it for years, it’s valuable to review the hard and soft skills you need to buy and manage single-family rental homes.
Hard skills are the core expertise and capabilities you need to succeed. Soft skills are not talked about as much, but they are equally important.
Let’s run through the hard skills first.
Market Analysis. REIs must develop an understanding of real estate markets. Through education and experience, they must discern trends by considering current conditions and future potentials. Assessing relative risk is an essential component of buying and managing rental properties.
Cash Flow. You don’t need to be a math whiz to become financially literate, but being able to calculate positive cash flow, to tell the difference between good deals and bad ones, and having a firm grasp of concepts like cap rates, price to rent ratios, and return on investment are essential skills to learn.
Trusted Processes. Good REIs don’t reinvent the wheel when they evaluate new deals. They know exactly how to plug the numbers and other variables into their own analytic system to get the answers to vital questions. When they sit down with lenders, they already know what type of financing they are after and whether they will qualify.
Here are the soft skills you need to be successful.
Communication. Whether verbally or in writing, a good REI knows how to communicate with lenders, agents, property managers, tenants, government officials, and more. Excellent listening skills are a must. A sense of timing and tact is also crucial.
Patience. Investing in rental real estate is not a sprint; it’s a marathon. Developing a solid portfolio of rental properties does not happen quickly. It takes years of hard work and determination. Persistence is a virtue for the REI. An unshakeable belief in yourself and the ability to stay the course will largely determine whether you’ll achieve your long-term goals.
Negotiation. Are you adept at getting other people to compromise? Investing in real estate is rarely a zero-sum game. Good real estate transactions are “win-win” deals. The ability to see what the other party needs in a transaction and provide that for them while at the same time achieving your objective is perhaps the most crucial part of being a successful REI.
Organization. Having “all of your ducks in a row” is an essential skill. REIs have to interface with many other pros, like bookkeepers, lawyers, real estate agents, appraisers, contractors, and property managers. Good record keeping and keeping a close track of projects’ status and required administrative tasks is essential.
Focus. Many REIs are part-time pros – they often have a career and other obligations that take up much of their time. If you’re distracted, no matter how many skills you have, you might miss crucial deadlines and details. Be honest with yourself about your capacity to handle what is required to reach your financial goals.
Some people can juggle a full-time career and their REI responsibilities successfully. Others have found, sometimes the hard way, that managing their rental properties and pursuing a full-time professional career just doesn’t work well for them.
Hiring a property manager does not mean that you completely step away from the rental real estate process. It does mean that you do not have to be intimately involved in the day-to-day hassles you would rather avoid, like dealing with property maintenance, collecting rents, tenant complaints, finding new tenants, etc.
If you are an REI and you want to explore the option of hiring a property manager, please reach out. If you have a property management company in place, but they are not giving you the top-tier service you deserve, give us a call.
At Sterling Property Solutions, we have a team in place that can answer all your questions and address any challenges. We are not a “cookie-cutter” property management company. Our strength is tailoring a property management program that addresses your individual needs.
Please give me a ring at 914-355-3277 or send me an email at Linda@Sterlingpsi.com. Together, let’s form a plan for you to take full advantage of the current conditions and put in place a robust, long-term program for your success.