Investing in commercial real estate can be a very lucrative business—but also a risky one that requires patience, fortitude, and industry knowledge to ultimately be successful. How do you separate yourself from the crowd? Here are eight ways highly effective investors stay on top of the game.
- Create a Solid Business Plan – It’s important to visualize both your short and long-term goals, which helps maintain focus and get back on track if you ever hit a stumbling block.
- Know Your Market Inside and Out – Acquire an in-depth understanding of each of your markets by keeping on top of current trends, transactions, and key economic figures that allow you to make informed decisions about purchases, dispositions, and other opportunities, both now and for the future.
- Read the News Every Day– Subscribe to publications that cater to both your market and industry, including daily newspapers, business journals, and trade publications. Set aside time each day—whether at breakfast, on your commute, or on a break—to catch up on the latest news. Blogs, Twitter, Facebook, and LinkedIn are four other sources to find and share stories related to your market.
- Never Stop Learning – Keep abreast of all industry regulations, laws, trends, terminology, and technology, which will allow you to adapt easily to market changes and conditions. Understand the ins and outs of your properties, your tenants, effective ways to save money, and how to keep your assets competitive.
- Understand Risk – There’s a reason there’s that old adage, “If it sounds too good to be true, it probably is.” Educate yourself on the risks that come with real estate investments—not only in terms of deals, but legal, financial, and market risk. Avoid investing in assets you don’t understand.
- Carve a Niche – While it may be enticing to be a jack of all trades, many successful real estate investors build their business on a specific niche; for instance, it might be only investing in certain asset classes, industries, or geographies. This allows investors to really develop a deep knowledge of the niche and everything that comes along with it.
- Build a Solid Team – From accountants, lenders, and lawyers to business partners, operational experts, and mentors, successful investors build a hard-working, knowledgeable team around them in order to share expertise and gain insight.
- Network – You never know from where your next deal or opportunity may come—perhaps from a colleague, client, business partner, friend, mentor, or fellow alumnus. There are many ways to drum up new business: Attend networking events, join boards, or become a member of industry or alumni organization, to name a few.