Investing in real estate can be a new and exciting venture, but it doesn’t come without challenges or setbacks. By setting goals, you’ll give yourself something to strive for, rather than simply throwing money at properties and hoping to make a profit. Here are five goals you should have when investing in real estate according to real estate expert Joseph Pingaro.
- Growth and Diversity
When investing in real estate, diversifying your portfolio and focusing on growth should be one of your main goals. Are you solely flipping houses? It might be a good idea to diversify by adding some rental properties to your portfolio. You’ll also want to focus on your personal growth; mainly your knowledge of the industry by educating yourself and staying up to date with trends and policies.
The old saying “don’t put all of your eggs in one basket” is pretty much the mantra for investors everywhere. While no investment portfolio can be 100% secure from losses, it certainly helps to add a little diversity so you don’t get wiped out in the event that your investment loses money. Diversifying with rental or commercial properties can help you branch out, learn more about the industry, and add an extra layer of security to your portfolio.
- Save Money
When you enter the investing world, it’s important that you create a goal of saving money; both in a separate account for emergencies and on the actual purchase price of your investments. Using a financial advisor to help you choose the right investments is just one of many ways to ensure you’re making decisions that will benefit you in the long run.
Paying attention to market trends and having appraisals done on potential properties is another way to save money in the industry. While a house or property may be listed for one price, an appraisal can paint a very different picture of the home’s actual worth. You’ll want to know the worth of the property you’re purchasing so you can decide whether or not it’s even a good investment to make.
Take some of your profits from each sale and put them away in a savings account so that you’ve got some extra cash in the event of a market downturn or other emergency. You don’t want to be left without some backup funding if your income source suddenly takes a dive!
- Increase Profits
Every investor’s main goal is to increase their profits, of course; but in real estate, this is easier said than done. You’ll want to choose your investments very carefully and work to maximize the equity of each property as much as possible. Equity is the difference between what you owe the bank and what the house will sell for, essentially your profit margin.
If you’ve got a lot of equity in a house, you can sell it for a profit and get a return on your investment. Alternatively, if you haven’t built up much equity in the properties you own, you could end up selling at a loss or simply break even.
Make increasing your profits a goal. The best way to do this is to buy the right properties at the right time, and improve them or pay extra on your mortgage to improve your equity. Also, diversifying by adding property management to your services can help you generate more income.
- Maximize Marketing Efforts
Every business should have marketing as one of their main expenses, and since you’re selling properties, this should be a top priority. Diversify your marketing efforts to include digital platforms like Facebook and Instagram, and be sure that you’re spending enough on marketing each month to get your listings in front of potential buyers.
You can also use your marketing platforms like social media to connect with potential sellers. You’ll get access to thousands of listings for homes and properties in your area, giving you plenty to choose from when you go to buy. Don’t forget to take great pictures of the homes or properties you’re selling. A good picture can literally make or break a potential connection with a lead. Keep your listings clear and concise, but with plenty of information for buyers to read.
- Set a Schedule
When you start investing in real estate, you need to decide if you’re looking to do it full-time or just as a side gig. This will help you decide how much time and money you want to put into the practice and will determine how far you’ll go in the industry.
That’s not to say that part-timers can’t make a hefty profit, but if you really want to maximize your earnings, investing full-time is the way to go. With the right knowledge, advice, and determination, you can make the equivalent of (or much more than) a full-time salary.
Investing is easy when you set goals for yourself and pay close attention to markets, as Pingaro advises. Be sure you’re not just jumping into the market; set goals, do your research, and know how much time you want to invest as well as how much money you’re willing to lose.