Investing in real estate can be a tricky prospect, even for a seasoned investor. The market can be notoriously volatile, and having too much money tied up in real estate when the market heads downward can be an economic death sentence. Even some of the world’s historically biggest and most successful real estate moguls have gone bankrupt practically overnight due to unpredictable and significant changes in the housing market. Unfortunately, there is no magic bullet to ensure that real estate investments turn a tidy profit. If there were, everyone would be a real estate expert. Even though there is no such secret to success, there are some ways to ensure that you can stay ahead of the game and avoid disaster.
- Know the Market
This is good advice no matter what, whether you’re working in dermatology or retail. There are a lot of factors that can influence the housing market and you’ll need to be familiar with what’s going on locally in order to make smart choices about where and when to invest. Whether or not the local job market is doing well is an important thing to know, in addition to whether or not the market itself is growing. Looking at the history of the market can be helpful, but what’s most impactful is what the growth of the area itself looks like in the near future. Public transportation and infrastructure projects in addition to other projects can make potential buyers more willing to purchase property or even pay more for the same.
- Be Prepared to Capitalize on New Opportunities
The history of economic development in most markets is the history of occasionally violent upheaval as the more agile and forward-thinking companies grab hold of major swaths of the market thanks to their taking advantage of new techniques and technologies that their competitors are frequently too entrenched to see the advantages of. AirBnb is a classic example of a business that saw resounding success thanks to their willingness to take advantage of new market opportunities. Blockchain, the technology that powers cryptocurrency, is being hailed by some as a powerful tool to increase efficiency and decrease transaction costs in the real estate market. It’s new and untested, but could make a major difference for the next business that can find out how to leverage it correctly.
- Find the Right Representation
If you’re selling your property through an agent, you need to be certain that you’re finding the right person to represent you and your interests, and especially if you’re not intimately familiar with the local market, that can make a big difference. You also want to be certain that you avoid an arrangement where you and the home buyer are represented by the same agent - experts generally believe that this arrangement is less than beneficial for both seller and buyer alike. You can also choose to forego hiring an agent to mediate the transaction, but just be sure that you know what you’re doing first.