If you are a private real estate investor you should know that buying and managing single -family or multi-unit rental homes is not an easy task. You should know that soft skills are just as important as hard skills.
Hard Skills Needed for Real Estate Success
A professional real estate investor should always develop hard skills knowledge such as market analysis, cash flow and taking into account the following essential real estate characteristics:
1 – Economic Characteristics
1-1 – Scarcity: it is the principle of allocating resources to satisfy as many personal needs as possible. The supply of land in a given location or a given quality is generally limited. For example, there is a finite number of built or possible residential houses in downtown Toronto.
1-2- Improvements: Building an improvement on one parcel of land can affect that land’s value and use. It can also affect the property of neighbors and the community.
1-3- The permanence of investment: The capital that is used for an improvement of a property can be a large fixed investment. In addition, the return on such investments tends to be long-term and relatively stable, making it a permanent investment.
1-4- Location: Real estate location is the most important economic characteristic of the land. This is because people prefer certain geographic areas over others, and these preferences will result in different values for properties in different locations. For example, 800 Sf in Toronto is worth more than 800 Sf in Montreal City.
2 – Physical Characteristics
2-1- Immobility: Even though some parts of land can be removable or altered, you can never change the parcel of a land.
2-2- Indestructibility: Land is also indestructible, permanent, and the location will never change.
2-3- Uniqueness: Although land can be similar and homes may even have the same design or layout, no two pieces of land are ever geographically the same.
2-4 Durability: Real estate investment can be durable and build multi-generation wealth. It can be held for decades or even centuries or be sold within a few days if you see a good opportunity.
These “hard skills” comprise the core knowledge and capabilities of successful real estate and rental property investors. This knowledge is certainly vital, but it has little worth if an individual can’t close a sale or work with key partners to form deals that are otherwise unattainable. That’s why having the right soft skills plays a critical role in being a leader in today’s real estate industry.
Soft Skills Needed for Real Estate Success
These skills are often the one thing that sets truly successful investors apart from the rest because in the end, real estate is based on relationships:
1- Communication: Communication may be the most important soft skill of them all. This is because so much in real estate investing relies on your ability to communicate well with others. Developing skills such as uncovering problems, active listening, tactfulness, and verbal communication are all critical aspects of real estate investing success.
2- Active Listening: Active listening requires undivided attention to truly understand what is being said. This does not necessarily mean listening to respond.
3- Patience: Patience is necessary in real estate because most deals take a while to close. For this reason, developing patience and persistence are essential to your long-term success.
4- Negotiation: Major real estate negotiations are assisted by good communication based on the reality of the current market and property conditions. Further, the negotiator should be able to see the deal from both sides and make wise business decisions.
5- Organization: Developing good organization skills and perhaps hiring good help with bookkeeping and property management is an absolute essential for long-term real estate investing success.
6- Tactfulness: There are times when a deal doesn’t make sense anymore because of a changing market, new goals, rising costs, among other reasons. The best leaders in real estate cut their losses on a property they own that no longer make sense financially or let go of a property they have been seeking.
While skills development is something that comes with effort and experience, there is help available for real estate investors at every stage of their investing journey. Zood Property Management is the real estate industry’s go-to resource for rental property investors, helping investors new and experienced feel confident in their choice. Call us today at zoodpm for free consultation.