10 Tips First-time Real Estate Investors Should Know
The real estate investors you see around started from a point, and it was much tougher in their days than it is currently. As a first-time real estate investor, you should be glad because a lot of free information is available with just a few clicks.
A good real estate investor should also be an excellent researcher and a reader. This blog explains ten tips you should have before investing in real estate. Remember that you need adequate knowledge to invest in real estate.
People who follow the tips here have all it takes to succeed in property investment in Kenya. Here is a breakdown:
It’s time to be attentive since you need these tips to help you succeed in property investment.
1. Be a good researcher.
Researching is the most basic skill you can rely on when starting a real estate investment. You should learn almost everything about property investment before starting.
Google and YouTube are currently very good leverage in searching for anything you need about real estate investment.
You should also learn to search title deeds lest you fall prey to conmen.
2. Ensure you can endure all challenges.
Real estate investment is not for the faint-hearted. For instance, don’t expect to start gaining profits as soon as you buy your property. Actually, it can take years before realizing your returns on investment.
In addition, a property needs closer management to ensure all repairs are made on time to avoid greater damages.
Can you avail yourself on the property premises regularly? If you have invested in real estate in Kenya while in the diaspora, you can hire a property manager to help you manage the property.
3. Can you sacrifice your lifestyle for a better future?
Real estate investment requires a lot of money at first. Therefore, you may have to dig deeper into your pockets to cater to maintenance costs and all repairs.
And this calls for a strained budget and cutting off unnecessary expenses. Can you manage that?
4. Location is the main determinant of your success.
When thinking of real estate investment, you should know that a good location results in better yields in the future. For example, locations near schools, big towns, and the industrial sector have a high demand for residential real estate.
Therefore, investing in residential or mixed-use real estate can be a great idea that will profit you. In addition, choose a location that has all social amenities since no one likes staying in areas with scarce social amenities.
5. Go in with the right mindset.
Research shows that you will win or lose from your mind before actualizing your plan.
You need a growth mindset to succeed in real estate investment.
You will not make it if you focus more on failures than progress. Yes, as a first-time real estate investor, you can make mistakes, but what you do after realizing your mistake makes the difference. Always ensure you arise again after failing. However, strategize to ensure you won’t make the same mistakes again.
6. Take baby steps till you are a pro.
Don’t plan to buy hundreds of buy-to-let apartments at once. Instead, focus on starting with little apartments you can comfortably manage.
After succeeding in a few properties, you can now take big strides in the industry. In addition, do your homework on which type of real estate you should expand.
7. Have some basic maths skills.
Basic maths skill is essential when doing any type of business. You don’t have to be a super genius about complex maths, but ensure you can calculate your monthly rental income, all expenses, and the cash flow.
You can pass the other complicated maths involving some accounting knowledge to your accountant. But it will be a good idea to know how to balance your maths, even without help. This idea can help you salvage your property investment if you get a bad accountant.
8. Be a good manager.
To succeed as a first-time real estate investor, you should have basic management skills. You can take free courses to learn management in Course Hero, Hubspot, or Udemy.
Being a good manager means you do the right thing at the right time. In addition, you will treat your real estate as a business.
9. Learn from your mistakes.
Everyone makes mistakes, but the difference comes after what you do about your mistake. You can make a mistake and still change the tactic and succeed later.
However, if you spend so much energy focusing on the mistake, you might miss the opportunity to grow your real estate.
10. Don’t procrastinate.
There is a saying, ‘procrastination is the thief of time. But again, let’s add that procrastination is the thief of your future. Once you postpone what you were to do today, you’ll spend some other time made for something else trying to catch up.
So, plan accordingly before investing in real estate and ensure you do what you should do at the right time.
The Bottom Line
As a first-time real estate investor, you should possess the above-mentioned tips before starting. Remember, these tips greatly impact your success in the property business sector.
Always ensure you do your homework before starting with anything, whatever it is.
Frequently Asked Questions
What are the steps for starting a real estate investment in Kenya?
You should have excellent research skills before starting the investment.
Keep your credit history good because you’ll need it to get better mortgage rates.
Get excellent property agents in Kenya to help you get good locations.
Get a real estate attorney to help you with all legal proceedings.
Cose the real estate deal with the help of your attorney, bank representative, and witnesses.
Which is the best type of real estate to start as a beginner?
As a real estate beginner, start small. You can start with a mixed-use property in a more populated area. Start with a few apartments, and you can gain profits and later expand to a big estate. In addition, you can start investing in REITs, which will help you gain more investor knowledge.
How does the 50% rule work in real estate, and should I focus on it as a first-time investor?
Most investor gurus believe that the 50% rule is a good way to know your actual cash flow in real estate. That is why you should know how the rule works. 50% goes to expenses, with the remaining half, you pay the mortgage, and the balance is the cash flow. Actually, this rule defines your real estate profits, which determine whether you should leave or go on with the investment.