8 tips for seasoned real estate investors from the experts

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Be you newbie in real estate or consider yourself a veteran, there is always a lot to learn.

To help you expand your knowledge of the industry, the New York Post spoke with three real estate experts for eight tips for savvy investors.

What did we consider the “seasoned investor” in this article? At least the person has dabbled in real estate and wants to improve their level – they probably own at least one profitable real estate investment.

“Investments in commercial real estate are dominated by institutions. One reason is that investing in rental properties requires an amount of capital (money that can be spent) that many small investors lack, ”said Paul Fiorilla, director of US research at Yardi Matrix, a data company. and commercial real estate research. “Another reason is that small investors, known in the industry as ‘retail’ investors, have historically had a high failure rate.”

No matter how much property you may own, we are all human, so you are bound to go wrong. But here are eight tips to help you avoid making them.

one. Understand the trajectory of the local market

“Nothing lasts forever, so don’t just focus on the current amenities of the neighborhood and city when considering an investment. See how this can change, ”said Igor Popov, chief economist at Kvartirny List. “Are recent relocations or newly opened businesses different from existing families and businesses? If so, the market can change quickly and developing your own forecast will prevent you from being caught off guard. ”

Fiorilla also mentioned the importance of investors having experience in the segment in which they are investing.

“Getting market data is vital. Real estate investors should be well aware of the potential pitfalls. [and] understand real estate management, ”said Fiorilla. “Have a good understanding of the fundamentals of supply, demand, and the economic drivers of the submarket.”

“The past year has shown that markets can change rapidly. When considering investment options, take the time to understand the markets in your area, ”added Bob Pinnegar, President and CEO of the National Condo Association. “In New York, for example, market conditions differ not only by zip code, but also by street – understanding these changes will help you make better investment decisions.”

2. Make sure you have the right technology

“As competition gets fiercer and rules get more complicated, the ability to offer tenants options such as paying rent online or online real estate tours is no longer a luxury,” Fiorilla said. “It is imperative to leverage the efficiency of real estate management software such as Yardi Breeze, which is designed for small property owners.”

3. Plan for market cycles

“As markets change, it will take you time to understand how market cycles affect your investment strategy,” Pinnegar said. “Take time to consider the best time to buy (when the market is up), the best time to sell (when the market is down), and even if you can hold onto the property during the market downturn. With future market conditions in mind, you can make the right decision. ”

“Will your real estate become more or less desirable if telecommuting accelerates? Should climate change accelerate? Expectations are taken into account in sales prices, and expectations change quickly, ”Popov added.

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four. Develop a vision of what you think is over or under

“The best investment ceases to be a good investment when you pay too much for it, so it’s useful to think about which amenities you think are overvalued or undervalued,” Popov said. “In today’s market, it’s difficult to make a deal, but it comes when you disagree with the market (and happen to be right). Explore the inconvenience of the property that you think will not bother tenants or prospective buyers. “

Fiorilla also emphasized the importance of knowing your investment opportunities.

“Small investors don’t have to go it alone,” he said. “They should study the fast-growing crowdfunding industry that allows retail investors to syndicate capital, led by experienced managers.”

five. Understand the wave of local regulations

“Most investors are well aware of the tax implications of real estate investments, but since housing policy is central at the state and local levels, the likelihood that policy changes will affect your profitability and risk is growing,” Popov explained. “Study current offerings and understand how the local market tide is moving to predict whether your investment will have a positive or negative risk associated with new regulations and rules.”

6. Make sure you have enough Capital

“It’s not enough just to have enough capital to buy a rental property. Investors need to reserve capital for contingencies such as mortgages, building renovations and property upgrades to improve energy efficiency and meet growing tenant demand, ”Fiorilla said.

7. Think about risk management

“As you continue to invest, be sure to consider all aspects of applicable risk management, which is becoming increasingly important in the investment field. For example, think about how your property is structured, ”Pinnegar said. “Can you defend your obligations if something happens at one of your sites?

“Another example: be sure to check your insurance policies. Are you insured against what may seem insignificant – flood insurance or cyber insurance? These seemingly insignificant decisions can have an incredible impact on your portfolio and investment success over the long term. ”

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eight. Be patient and structure your assets for the future

“Be sure to think over your long-term plans. For example, do you plan to sell all of your property someday? Do you plan to pass them on as a heritage of generations? Discussing these solutions now will help increase the success of your investments in the future, ”said Pinnegar.

Success takes time. “While these profits can be increased through judicious use of borrowed funds and higher rents, it is important to understand that success takes time, managerial experience and luck,” said Fiorilla.

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