You may be fascinated by some artistic mid-century, retro-style home decor - or you may fall in love with the exterior landscape of a villa. However, is that the kind of 'vision' you need to succeed as a property investor?
You must focus on the 'value' of the property you examine and determine if it is worth investing in. You need to develop a property investor's perspective to make the right investment decisions at the right time. Then, how would you know that you are not thinking like a property investor?
We will help you out with this. In this article, let's discuss the 8 signs that make you understand that you are not thinking like a property investor:
Not Considering Location
A prime location is the first quality every buyer will look into in a property while investing. Easy access to the location through various modes of transportation and the availability of social and commercial amenities nearby would be a great bonus.
You can renovate a property for value addition. However, it's impossible to change the location of a property. If you are missing that aspect, you need to change your mindset. Prefer hunting for real estate deals in the best locations for a better ROI.
Not Bothered of Amenities
Along with the plot area, built-up area, and several bedrooms in a property, what matters the most are the amenities provided. Amenities make the buyers consider a property more beneficial to lead a convenient and lavish lifestyle.
Aren't you thinking of desirable features in an investment property - like swimming pools in the backyard, a home gym, a home office, and other kinds? You are not thinking like a property investor. These additions make a property more attractive and sought-after.
Not Thinking of House Flipping
If you neglect a property as it is old with outdated home decor, you are missing a golden opportunity. Involve a professional property inspector to examine the physical condition of the property and think of repair costs beforehand.
Ensure that the selling price after renovation will cover the initial cost and expenses for repairs. House flipping is one of the best ways to make good profits in a short duration. Working with a renovation contractor and implementing your creative ideas to renovate the property will surely add massive value.
Not Mitigating Financial Risk
Real estate investing is a business. While analyzing a deal, the most significant aspect is to determine if the deal is financially profitable.
While buying an independent villa, you consider the current market price and upgrade cost. You may get a loan to acquire the property. Your sale should bring considerable profit.
While investing in a multifamily apartment, think of the average rental rate based on the location and amenities. Balance your cash flow, debts, taxes, and property management costs. You should not be left with debts while exiting the deal down the line after the holding period.
Not Choosing the Right Investment Property
Pro property investors know what to look for in what property type and class. Usually, land prices rise, and constructed buildings may lose value due to depreciation. Therefore, investors consider appreciation for a home on a plot, and for apartments, they look for rental income.
If you are not following this perspective while choosing investment properties, you may end up in a less profitable deal. Be calculative while conducting due diligence for every property you come across.
Not Paying Attention to Details
As a property investor, you need to consider several factors and the location of the property you are investing in. The best way to examine a property is to think from a tenant's perspective. Think of details like balconies attached to bedrooms, parking space, a lake view, and much more.
Some features and amenities may be the USP of a property. You must find them and promote them tactfully to attract buyers or tenants willing to rent that property. If you are not thinking in this direction, it may affect your profitability.
Not Following Real Estate Trends
Property investors keep an eye on the latest developments in the real estate sector. Following industry news, latest updates, interviews, webinars, and events will help you understand what your target audience is looking for.
At the same time, you can work on long-term investment strategies by keeping away from short-term gimmicks like buying a property in the so-called 'hot spot.' If you are not following real estate market trends, you may make emotion-driven investment decisions. Such decisions are bad for a property investor.
Not Leveraging Technology
If you maintain records using a pen and paper, work on confusing spreadsheets, and follow conventional modes of communication, your methodology is outdated. Look out for the cutting-edge technology in real estate investing in automating your workflow.
Technology-driven solutions, like CRMs, investor portals, property management software, listing platforms, and more, are driving change in today's real estate sector. If you are not techno-savvy and continue with the same old approach, it may slow down your growth.
We created an infographic to cover these aspects in a summarized manner. We hope the infographic will help you remember the adverse signs and inspire you to avoid them while looking for your next investment property. Here is the infographic:
The article and the following infographic briefs the 8 signs indicating that you are not thinking like a property investor. We are underlining the significant pillars of a property investor's vision from a different point of view. We hope that the article provides a unique perspective to your way of looking at an investment property and helps you make wise property investment decisions in the long run.