Posted on September 6, 2012 by admin

In 1989, Dr. Stephen Covey published a work that outlines the timeless principles in life, living, being successful, and being an effective source for those around you. Since the arrival of his book, The Seven Habits of Highly Effective People, individuals, think tanks, and even industries have created their own form of the book around their discipline.

Real Estate Investment is no different here. Investment sites throughout the internet have their own interpretations of these principles, and for the most part, they are on the money. But many of them reflect more on the aspects of “common knowledge” and not “common practice,” meaning they tell you what to think about, but not what to do.

We think our list is a little different. Let’s call it 7 Habits of Highly Effective Real Estate Investors: The Realty Corp Version. These are actionable ideas that will bring you a bigger yield in the long term.

Planning

Profitability is the key benchmark for property investment, and planning is the only mechanism for knowing when you get there. You can only set realistic goals if you’ve planned and defined how you get there and what risks are involved. A plan gives you a long-term view, which is imperative in a long term real estate investment strategy. A plan lays out your assets, risks, success measures and when that success will happen.

Understanding

Knowing your market (and your place in it) gives you the advantage of strategic understanding. Many property investors keep up to date on economic trends including industry projections, mortgage rates, employment rates (locally and nationally) and what sea change may be coming down the road.

Stay on top of it. There are serious risks in neglecting your education, so don’t learn laws by breaking them.

Honesty

Everyone knows of the old stereotype of the dishonest property owner, milking their tenants for every cent they can, offering as little in return as they can get away with. Those types of investors are out there, too, but they are not the norm and they are not as successful as those with high ethical standards who recognize that everyone has a part to play in that success. Real estate, like business, is ultimately about people, not systems or bricks and mortar. Your reputation is currency. Keep it high value.

Clarity

All investors must be clear in their focus on the marketplace. Deepen your understanding of one marketplace before diving into another. Being a successful, long-term property investor means looking at your pursuit like a career—you’ve got to earn your stripes in one area before you can move upward. Sharpen your strategy as you go along.

People

Remember those fateful words, “It’s just business. Nothing personal.” Forget them. They are about as backward as any writer can get. Business is people, and that makes it personal. Everyone has something to offer, and everyone has something they need. Listen and respond to complaints and concerns, and do so responsibly and swiftly. Only the best referral partners succeed in competitive markets—and realty is almost always competitive.

As people, we need people, and the act of building community is as old as language. Recognize your need to build partners, mentors, colleagues, referrals, friends and resources. In investing, you are what you know. Build your knowledge upon those willing to share with you—and share your knowledge with them.

Tax

It might seem strange to have Tax as a separate habit (and not profit), but tax for property investors can be a large annual expense—without a strategic plan in mind, it can eat your profits faster than you can make them. Seek the help of an accountant that has experience in your market focus. You’ll be fast friends, because their costs will pale in comparison to your tax savings.

Help

If you’re starting, find help from other experts. Seek the advice of real estate investment specialists, long-time property investors, lawyers, accountants and even mavens. Take the risk out of doing things yourself and leverage the expertise of others.

If you’re a seasoned pro, offer help to others. Broaden your network by sharing your successes, failures and experiences with those who could use it. Share your best contacts and get that referral chain rolling. It always comes back to you.