Five Ways to Build a Long-term Real Estate Investment Strategy

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Many view real estate investing as a short-term game. Fix-and-flip investing, in particular, can seem like an opportunity to get in, make some money, and get out. But for those with the vision, drive and skill-set to thrive in this industry, real estate investing can be much more lucrative when viewed as a long-term opportunity.

 

Building a long-term business, though, can be a challenge. You’ll not only have to manage your business profitably, but you’ll have to ride out changing market conditions and successfully navigate among competitors while growing your customer base. For those willing to take on the challenge, this form of real estate investing can bring rich returns.

 

Here are five strategies to consider as you build your real estate investment business for the present — and for the future.

 

1) Start by mastering one thing

 

Real estate investing is a deep, diverse field with many elements and strategies to consider. Rather than trying to master them all at once, focus on perfecting one aspect of your business at a time. Once you’ve developed your skills there, move to another facet. Soon, you’ll have a well-rounded skill set, one that will be primed for years of growth. What’s more, you won’t have burned yourself out in the process by trying to do too much too soon.

 

2) Build your team of experts

 

To succeed in this business, where time lost is money wasted, it’s critical to have a team of experts you can depend on to get things done quickly, and done right the first time.

 

Ideally, your team of experts should include:

 

  • A skilled general contractor with an excellent track record for on-time, quality workmanship. You will also need a backup contractor in case your go-to is not available (and a backup to your backup).

 

  • A lender that can approve and fund your project financing as quickly as possible.

 

  • One or more real estate agents who specialize in investment properties.

 

  • A CPA with expert-level experience in tax laws specific to real estate investing.

 

  • A qualified real estate attorney who knows from experience that complicated legal issues can arise unexpectedly in property investing.

 

 

3) Develop different strategies for different competitors

 

Investing in real estate is a zero-sum game. There is a limited number of available, desirable properties in a given market, and to be able to succeed at the highest level and leverage these properties to your advantage, you have to be able to handle competitors well. It’s not enough to plan for general competition, either. You must prepare for different kinds of opposition from different kinds of investors. For example, are you prepared to compete for off-market properties where sellers may prefer cash offers? Be sure to develop different strategies for dealing with bigger, well-established competitors, as well as leaner upstarts.

 

4) Hone your marketing skills

 

In his book The 33 Ruthless Rules of Local Advertising, author Michael Corbett wrote “If your doors are open, you should be advertising.” Though his book was first released in the mid-1990s, before the explosion of social media and Internet advertising platforms, Corbett’s advice holds true today. Businesses must market themselves to succeed, and yours is no different. Learn what it takes to cut through the clutter of your market, start advertising, and don’t let up. The kind of advertising you do may be a bit different than what Corbett envisioned, but the goal will be the same—maximizing your ROI.

 

5) Reinvest

 

Finally, as you build and grow your business, don’t forget to reinvest what you earn, both in your business and in yourself. Consistently returning your profits back into your business will keep it healthy and growing for years to come, while making time to develop your skill set will help you meet new challenges as the world of real estate changes around you.

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