It was Orison Swett Marden, who said, ”we starve ourselves in the midst of plenty, because of our strangling thought.” But I think Harvey S. Firestone stated it more forcefully when he said “Thought, not money ,is the real business capital, and if you know absolutely that what you are doing is right, then you are bound to accomplish it in due season.” To succeed in life, you need to have and apply accurate information.
Although you cannot allow others to do your thinking for you, you definitely need information from several sources and perspectives to enrich your thought. To improve your chances of succeeding in real estate investment, we’ll consider several valuable advice that has worked for some and hopefully will work for you.
Seek and you shall find
Whatever you’re looking for, be it property to buy or lease, someone somewhere has it just where you want it. Your job is to find that person and that property. You may need to read through several property adverts for several weeks, make several calls to make enquiries and carry out several physical inspections but ultimately you will find. And that is what counts.
Start with what you have
There is always a real estate investment that suits your pocket. Often, you need seed capital to start your journey to real estate riches but this capital need not be several millions. A few hundreds or thousands might do. And a cutting back on your cost of living and savings could provide you with this money.
Surround yourself with trusted professionals
There is a limit to what you know. You need others to succeed but not just anybody. Your success team should have a real estate agent/valuer, a legal practitioner, a surveyor, a banker and several real estate related professionals.
Buy low, sell high
This phrase that is often associated with the stock market is equally applicable to real estate investment. If you buy low and allow your investment to grow, it will make you a millionaire. In a certain area of Nigeria the price of a parcel of land was N500,000 ten years ago. The same land is now N10m.
Focus on high growth areas
Location, location and location. A high growth area is an area that is either close to a commercial or industrial area or one in which a nearby development is stimulating its growth. People normally go to where their jobs are and ultimately most of them will chose to live and settle down close to where they work. The population growth that will result from these trends often affects the prices of property positively. For instance, the location of a university in a community would definitely attract people to that community and usually affect the value of the real estate in that area.
Negotiate
Everything is negotiable. And in every negotiation there are three potential outcomes: win/lose, win/win and no deal. Whether you are negotiating with a buyer or a seller the potential outcomes are the same. Win/win means that the parties were able to reach a compromise and both were satisfied with the deal. In a win/lose deal the parties believe in a winner takes all. Often one of the parties in a win/lose deal is grieved by the deal and considers it one sided .But in a win/win all the parties mutually benefit.
Higher and better use
When you buy a property always explore ways to maximise the value of that property. This can be achieved ,for instance, by turning empty spaces into sources of cash flow. A person could turn a bungalow that has few rooms facing one another into a modern two three bedroom flats with the rooms en suite and getting more income and better tenants in the process. With a little creativity and observation you can dramatically increase the value of your property.
When selling, be careful of prolonged holding out
Sometimes sellers lose a lot of money by being unnecessarily rigid with their sales price while ignoring the market trend. A seller should know how to strike the balance so that he or she does not end up losing out. For instance ,a seller lost over N20m by repelling buyers with unreasonable demands until the information got circulated and people stop turning up for inspection until he had to settle for one of the several low prices he started getting. Always review your position in relation to the reality of the market place.
Cash flow, cash flow and cash flow
It is not enough to buy properties but you must be satisfied with the income they are putting into your pocket. Many astute investors understand that cash flow from properties is one of the most reliable means of securing wealth and retiring well. And it is easy to estimate the potential income that could be generated on a property. The basic system is to find out the current value of the property and calculate an annual percentage increase per annum. Knowing that real estate increases in value, you can be sure that your annual cash flow from your real estate investment will take care of your needs.
By Abiodun Doherty
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