When a person decides to build a career in the field of real estate, they are effectively becoming a part of an extremely volatile market. After all, the way that one makes money in this industry is by selling properties for more than they purchased them for.
Unfortunately, prices depend on a lot of independent factors that are seldom controllable. For example, a downturn in the market could diminish one’s expected price and push down into an area of unprofitability.
Regardless, it is hard to deny that real estate is one of the most lucrative fields in the world. Just think about the number of people who have earned millions of dollars by taking their time and building successful ventures. Still, the uncertainties that must be faced when first entering the industry remain. In fact, this is the stage where most people fall off as they lack the necessary knowledge, skill, or persistence.
So, what are some good strategies and tips to get into the real estate business?
Know the Requirements
Just like any other professional field, one cannot simply get into real estate overnight. Similar to practices like accounting or management, there is a series of requirements put in place by the federal and state law.
These include things like education and experience. In Texas, per se, people must have as many as 180 hours of education to qualify. Thus, newcomers should do their research on everything that must be done before they can even be eligible to join the market.
Obtain the Proper Credentials
After going through the necessary education, most states will have certifications that prospective real estate agents have to earn. Examples would be broker licenses that individuals must hold in order to participate in transactions. Failing to get the proper accreditation could easily jeopardize one’s career before it even starts. The reason why is the fact that they might be committing a crime and become a subject to the scrutiny of the law. And rightfully so.
In the end, nobody wants a person who does their taxes to pretend to be a CPA while having no formal training in accounting. The exact same principle applies to real estate as the stakes are equally high.
Learn the Subtle Art of Negotiation
Expectedly, a lot of the real estate profession boils down to the art of negotiation. This, however, does not mean haggling with people in a direct fashion. Instead, there are specific steps and principles that must be respected. Moreover, understanding the basics of human psychology will make it much easier to negotiate the desired prices.
How can someone achieve this proficiency? Once again, by going through the necessary training and real-life scenarios.
Understand What to Look For
Not every property that one purchases will automatically appreciate. If it was that easy, practically everyone would be in real estate for the quick income.
The reality is much different.
To find a home that will increase in value, one will probably have to spend hundreds of hours researching. This includes everything from online analyses to face-to-face reviews. And still, it is impossible to be entirely sure that the property will appreciate as there are no ways to guarantee it.
The golden rule is to seek up-and-coming neighborhoods that are expected to grow in value soon. Then, one must dedicate themselves to improving the property and letting the economy go upward.
Have Back-Up Plans
Sometimes, it is not realistic to expect to find a buyer. This may include periods of economic downturns when the number of individuals who are in the market for a home is low.
In order to get through such stages, there are some solutions that people can resort to. According to a student who entered the field of real estate recently, Sean Francis Tucker, renting is the first alternative. Doing so will bring in passive income that may help stay afloat while one waits for the conditions to improve and buyers to show up.
A large number of professionals fail at scaling their practices. This means that they try to build too much too rapidly. For instance, flipping a $40,000 property for a 20% gain should not be followed by a purchase of a $500,000 home. In fact, Sean Francis Tucker describes this as a one-way ticket to failure.
The right way to approach growth is to take it one step at a time and gradually build an empire.