For agents who work extensively with clients who are new to the real estate investment game, it is important to develop a strategy to help them diversify their investments, develop cash flow for their retirement years or even achieve other financial goals.
According to Abhi Golhar, managing partner of Summit & Crowne and host of the daily radio show Real Estate Deal Talk, investing in real estate can be a smart idea. In a recent blog, he detailed key tips for real estate investors.
“Real estate tends to be less volatile than the stock market, and the owners of investment properties can benefit from price appreciation as well as the current rent roll,” he wrote recently in Forbes.
As agents well know, that owning investment real estate is no easy road to riches. If it were, everyone who owned an apartment building or a rental home would be rich, and clearly, that is not the case.
“If you are new to the world of real estate investing, you need to plan carefully, develop a strategy for success and treat your new endeavor like the business it is,” Golhar said. “In my experience as a real estate investor, it makes sense to understand your investment personality, but also the role the business of real estate plays in your daily life.”
Golhar offers some timely tips new real estate investors can use to make more money while reducing their risk.
First, clients should treat their investment like the business that it is. Real estate investing is a serious business, and they need to take it seriously.
Moreover, these clients need to know their strengths and weaknesses. This will maximize their chances for success. If an investing client lacks carpentry skills, Golhar notes you should advise them to research the costs of these services and build that into their cash flow assumptions.
It seems obvious, but Golhar also notes that investors should start with a plan. If your client doesn’t know where they want to go, they will never get there. Make sure these clients map out what they hope to achieve through real estate investment.
“People have made fortunes in the world of real estate, but buying properties is not a get-rich-quick scheme,” Golhar writes. “If you play your cards right and invest carefully, you can use your rental properties to get rich slowly, building wealth over time, thereby paving the way to a more financially secure future.”