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REAL ESTATE INVESTING FOR BEGINNERS: 5 SKILLS OF SUCCESSFUL INVESTORS

These tips can help you get started in the popular — and lucrative — industry of
real estate investing.

 * Valerie Kirk

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Blog

Sep 26, 2023
9 minute read


Valued at more than $230 trillion, real estate investments are the world’s
largest asset class and one of the most entrepreneurial fields, drawing people
in with the promise of predictable, long-term passive income, positive returns
on investments, and favorable tax advantages.

Because real estate is often considered a low-risk investment, many are quick to
jump in with expectations of turning a quick profit. Popular television shows on
buying investment property and flipping houses feed into the idea that investing
in real estate is fun and easy.

However, not all real estate investments are low risk. Some require specialized
real estate skills and many require patience and time to realize a positive
return on investment.

If you’re considering becoming a real estate investor and entrepreneur, this
guide to the real estate industry offers an overview of real estate investing
for beginners and the five skills needed for successful real estate investment
careers.  


TYPES OF REAL ESTATE

Not all real estate is the same — properties are often zoned for specific uses.
Before you become an investor, it is important  to understand the different
types of real estate and typical zoning regulations to guide you on what to
include in your investment portfolio.


RESIDENTIAL

Residential real estate is property that has been specifically zoned for living
in. This includes single- and multi-family homes and apartment buildings.


COMMERCIAL PROPERTY

Commercial property is real estate that has been zoned for businesses, typically
industrial or retail. This could include shopping malls, office buildings,
warehouses, and manufacturing sites. 


LAND

Land refers to the ground surface and extends both below the earth’s surface and
up into higher airspace. It encompasses any structures, water, plants, or
minerals located on the land. Land can also be zoned as residential, commercial,
industrial, agricultural, or other specific local zoning designations.
Developers may petition local governments to change the zoning laws for land
that they own (or want to buy).


POTENTIAL CAREER PATHS FOR ASPIRING REAL ESTATE PROFESSIONALS

There are so many career paths in real estate, but before you jump in, it’s
important to understand that there is a difference between investing in and
working in real estate.

When you work in real estate, you don’t put your own money into properties.
Instead, you can sell a property for different owners, real estate development
companies, or investment groups; manage properties; or help finance properties.


REAL ESTATE AGENT

A good real estate agent is an integral part of successful property sales. As
licensed professionals, real estate agents are hired by individuals or business
groups who want to buy or sell properties to help guide complicated real estate
transactions. They typically work on commission.

If you want to become a real estate agent, your responsibilities include:

 * Understanding the local market. Based on your knowledge of the local market,
   you will help set asking prices to meet your client’s specific needs.
 * Marketing properties. You will advise your client on how to make their
   properties attractive (such as staging homes or suggesting cosmetic
   upgrades). You should also have the tools, experience, and contacts to market
   properties to a wider audience.  
 * Handling the paperwork. Buying or selling property can be complicated – and
   real estate transactions require a lot of paperwork. As a real estate agent,
   you will know what documentation is required, and in many cases, can draw up
   the contract.
 * Negotiating price. Buying and selling real estate often involves
   negotiations, which you will facilitate. 


PROPERTY MANAGER

Property managers are hired by property owners to manage the day-to-day property
operations. As a property manager, your responsibilities could include: 

 * Finding prospective renters
 * Collecting deposits and rent
 * Handling maintenance requests
 * Checking on properties if the owners live out of the area


REAL ESTATE INVESTOR

Real estate investors put money into properties in the hopes of selling that
investment for a profit at a future date. If you choose to be a real estate
investor, you could own one or more properties, or pool your money with other
investors into a fund that includes several properties. You earn money when
properties in the fund are sold. You may also earn income from the rental of the
property while holding the asset.  

As an investor, you could have a full-time job in a different industry or invest
in other types of businesses. 

Read more about how to become a real estate investor


EARNING MONEY AS A REAL ESTATE INVESTOR

Real estate investors can earn money in the real estate market even during times
of rising interest rates. How you choose to invest will depend on your risk
tolerance and available investment funds. There are several ways to earn money
by investing in real estate.


PROPERTY APPRECIATION

Real estate generally appreciates in value over time — your profit comes from
selling a property at a higher value than what you bought it for. Savvy
investors buy properties in up-and-coming neighborhoods so their property
appreciates at a higher rate over the long term. Property appreciation is
generally a long-term investment that offers a one-time pay-out when the
property is sold.   


RENTAL INCOME

For predictable, regular cash flow and passive income, you could buy properties
to rent out — either through long-term leases or as short-term vacation rentals.
Choosing this investment strategy means you become a landlord, which makes you
responsible for collecting the rent or making emergency repairs. You could also
choose to work with property management companies to manage your rental
investment property.  


PROPERTY FLIPPING

Flipping houses has grown in popularity due to television shows that make it
look easy and lucrative. To make money flipping houses, you could buy properties
that are run down or outdated at a low price for the local market, then renovate
the houses quickly and sell at a higher price. Flipping houses can have big
profits, but it helps to know how to make repairs and do renovations on your
own. Having  good relationships with contractors who can help you estimate the
costs of the repairs and make the repairs at a reasonable price is also helpful.


REAL ESTATE INVESTMENT TRUSTS

If you don’t want to own property but still want to generate income from the
lucrative real estate market, you can invest in real estate investment trusts
(REITs), which act like mutual funds for commercial real estate. Typically,
REITs are owned by a company that owns or finances commercial property. You and
other individuals invest in the RIET, which is publicly traded, making it very
similar to investing in the stock market. 

If the REIT makes money, you earn dividends, which you can cash out or reinvest.
The upside of investing in a REIT is that they don’t require a large up-front
investment and you can earn regular dividends. However, you won’t benefit from
property appreciation and you will be subject to taxes when you cash out your
dividends.

Enroll in our 2-day real estate investing course today!


READY TO BECOME A REAL ESTATE INVESTOR? THESE 5 SKILLS WILL HELP YOU FIND
SUCCESS.

While anyone can invest in real estate, it helps to have some fundamental real
estate skills and knowledge to find success and earn money. If you are a
beginner, here are five skills you should have to find success in real estate
investment.


1. A FAMILIARITY WITH REAL ESTATE TERMINOLOGY

As with most industries, real estate uses specific terminology. It’s helpful to
know and understand these terms when you decide to become an investor. This
guide has explained many common terms, including REITs, appreciation, and
flipping. Here are a few other terms you should know when investing in real
estate:

 * Cash Flow. Your cash flow is calculated by the amount of money generated by a
   property minus the operating costs and expenses. 
 * Due Diligence. Real estate is often a large investment, so it’s important to
   do your research about the property, including reviewing documents,
   estimating your operating expenses, and evaluating risks. This research is
   called due diligence.
 * HOA. This is an acronym for Home Owners Association, which oversees the
   physical appearance of many neighborhoods and condominiums. When you buy an
   investment property in an HOA community, you are subject to the HOA rules.
   It’s important to know those rules, as they could impact your ability to rent
   the property or make renovations. You may also have to include HOA
   requirements to your rental agreement (such as maintaining the lawn).
 * Turnkey Property. A turnkey property is a property that is move-in ready.
 * Inspection Contingency. Buyers and investors can include this in a contract,
   which means that the buyer must have the home inspected and review the report
   prior to the sale. The price can be renegotiated based on the findings of the
   inspection.

If you are planning to purchase a property as part of your investment strategy,
you should also understand the different types of home mortgages, including
adjustable rate, interest only, and fixed rate mortgages. 


2. THE WILLINGNESS TO MAKE LONG TERM, CALCULATED DECISIONS

According to Forbes, real estate investment is one of the safest types of
investments. However, they’re generally long-term, and you should research the
properties and locations in which you are investing. Doing your due diligence
prior to making an investment is critical, along with having a long-term
strategy for realizing a return on your investment. 


 3. A STRONG SOCIAL MEDIA PRESENCE

Investing in real estate is a popular pursuit, which means you must be quick to
jump on opportunities. Having a strong social media presence can help you
network with fellow investors, discover investment property opportunities
quickly, keep up-to-date with the latest news in the real estate market
industry, rent your property, and sell when you are ready. 


4. SOFT SKILLS

Because real estate investors spend a great deal of time interacting with
others, it helps to have certain soft skills in addition to an understanding of
the real estate industry. Soft skills include excellent written and verbal
communication skills to maintain relationships. You should also develop good
negotiation, problem solving, and organization skills. Having a willingness to
learn will help you in the beginning of your investment career, along with being
able to adapt to changing market situations.


5. VALUABLE CREDENTIALS 

If you want to start investing in real estate, it’s a good idea to take some
classes or enroll in a certificate program to help you understand the industry
and market forces, learn how to build an investment strategy, and understand the
financial aspects of investing in real estate. Certificate program classes are
generally open to anyone, regardless of age, background, or current career, and
are scheduled at times that are convenient for busy working professionals. 


TAKE THE NEXT STEP TOWARD BECOMING A SUCCESSFUL REAL ESTATE INVESTOR

If you are ready to become a real estate investor, Harvard DCE Professional &
Executive Development offers Real Estate Investments: Assets, Markets, and
Current Trends, a two-day program where you will learn the fundamentals of real
estate assets, how to develop investment strategies, how to raise capital, and
more.  

You can also earn a Real Estate Investment Graduate Certificate from Harvard
Extension School, which includes four courses that cover different real estate
investment opportunities along with the forces that drive property values and
the life cycle of buildings and neighborhoods. The program offers hands-on
experience for creating financial models, analyzing cash flows, and measuring
returns on investments.

There is money to be made in real estate with the right investment approach
based on your situation and goals. Develop tactical, real-world knowledge and
skills for investing in real estate by earning a real estate investment
certificate. 

Enroll today to start your journey in real estate investing!

Explore all our Professional & Executive Development programs

Sep 26, 2023
Blog
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ABOUT THE AUTHOR


 * VALERIE KIRK
   
   Valerie Kirk is a freelance writer and corporate storyteller specializing in
   customer and community outreach and topics and trends in education,
   technology, and healthcare. Based in Maryland near the Chesapeake Bay, she
   spends her free time exploring nature by bike, paddle board, or on long hikes
   with her family.


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