Six Insider Tips for Successful Real Estate Investing

By Sophia Reynolds Nov 29, 2024

Discover the tactics employed by seasoned real estate professionals to stay ahead of market trends and maximize profits.

Successful real estate investing is not a game of chance, but rather the result of in-depth market knowledge and strategic decision making. Many real estate professionals make informed investment choices based on comprehensive understanding of their chosen area, including planned developments, transportation patterns, and school ratings. Here, we delve into six tactics used by insiders to optimize their investment returns and stay ahead of market trends.

In any real estate market, understanding current price trends is crucial. A potential investor should monitor the pace of home price acceleration in different areas and compare the average home price with that of neighbouring locations. This helps identify areas of strong demand, and with continued tracking, helps in determining fair prices for properties.

The importance of understanding pricing can not be understated when it comes to real estate investment, as asserted by DJ Olojo, a realtor and real estate investor based in Atlanta. Realtors, due to their access to the Multiple Listing Service (MLS), local newspapers, online real estate sites, and local government records of recent transaction prices, serve as valuable sources of this information.

Aside from pricing, networking is also an essential element of successful real estate investing. Joining your local real estate investor association (REIA), for instance, can offer invaluable learning opportunities and connections. According to Olojo, local investors can impart nuanced understanding of your specific market, from the best and worst streets to work with the right contractors and realtors to avoid.

Spotting signs of new infrastructure development, like roads and schools, is another promising indicator of a growing and potentially profitable community. Similarly, looking out for land clearing or construction activities around major roadways or intriguing developments like new shopping centers could suggest potential areas of investment.

Another important factor to consider is an area's property tax rate. As areas with lower or stable taxes are usually in higher demand, this information can be useful in identifying attractive investment markets. Calling the local tax assessor could give you an insight into the tax rate as well as the likelihood of a potential reassessment.

In addition to the above, paying attention to school rankings, population growth rates, crime rates, rental rates, properties for sale, and the typical time homes stay on the market can all contribute to making shrewd investment decisions. Monitor local transportation developments closely, as well. Locations on the fringe of major cities, especially those near bus and rail routes, tend to increase in value over time.

Remember that successful investing in real estate doesn't always have to mean buying a property outright. For those starting with smaller budgets, alternative options like investing in real estate investment trusts (REITs) or using crowdfunding platforms like Fundrise or CrowdStreet are worth considering.

As a final piece of advice, it is important to do thorough research and use local resources to ascertain both current and future hotspots in the real estate market. While all this information is readily available to those who look, it requires dedication and diligence to convert this knowledge into successful real estate investments.

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