“Real estate is an imperishable asset, ever increasing in value. It is the most solid security that human ingenuity has devised. It is the basis of all security and about the only indestructible security.” – Russell Sage
Real estate is a great investment, but investing doesn’t automatically lead to success. If you want your real estate investment career to thrive now and far into the future, you’ve got to adopt the right mindset.
Fortunately, we've got the rules of thumb—and some helpful quotes—to guide your way.
Rule #1: Prioritize Value
"Price is what you pay. Value is what you get." – Warren Buffett
Preconceptions and misconceptions will both have you believing that there are things more important than the value you receive as a real estate investor. The idea of “value” covers more than just the monetary worth of your investment property. Investors experience added-value when they employ the services of skilled property managers and real estate professionals.
It’s not about the time you spend investing, it’s how effective – how valuable – the results are. When your investments run like a well-oiled machine, you minimize risk and maximize your value.
Rule #2: Cultivate Patience
“The world is full of foolish gamblers and they will not do as well as the patient investors.” – Charlie Munger
Patience is key in this business. Some new investors start their journey and become frustrated when it seems like growth is coming more slowly than they’d thought. Investing in real estate is a long game. This is partly why it is so important to start as soon as you’re able to. As Warren Buffett once said, today’s investors miss out on yesterday’s gains.
Be patient. Let your investments grow. You may feel the temptation to jump out when the market seems shaky or when it seems like things aren’t moving in the right direction. Persevere. Wisely selected real estate almost always pays off.
Rule #3: Accept the Unknown
“Progress always involves risk. You can’t steal second base and keep your foot on first.” – Fred Wilcox
Being risk-adverse won’t help you invest well. We all know that there is inherent risk in any type of investment, and while you may face fewer risks and more certainty in real estate, there’s still the element of the unknown. Investors need to have a plan but they also must accept that circumstances may cause that plan to deviate. And that’s okay!
If you want to succeed, you must accept that moving forward means moving into the unknown. Embrace it. Don’t fear failure.
Rule #4: Create Purpose & Action
“An investor without investment objectives is like a traveler without a destination.” – Anonymous
Even passive investors must be action-oriented. Start with your purpose and your objectives. Why are you investing? What it is you really want to accomplish? Are you aiming for an early retirement? Establishing generational wealth? Your goals impact how you invest and your plans for growth.
You don’t want to jump on every opportunity: only those that meet the criteria and standards for the vision you’ve set. Be willing to wait for the right investments.
It’s not enough, either, to just know what you want and why you want it. You must plan how to get it. Successful investors don’t get stuck daydreaming. They’re too busy making dreams reality.
Rule #5: Leave Regrets Behind
“In the business world, the rearview mirror is always clearer than the windshield.” – Warren Buffett
If you don’t know this already, let us break it to you: you’re going to make mistake as a real estate investor. Mistakes – even failure – is nothing to be ashamed of. Failure provides us opportunities for growth in knowledge and skill. They refine us by fire, creating savvy, experienced investors that know the business inside and out.
Expect failure and anticipate the reality of regret.
If you find yourself regretting a mistake or a missed opportunity, don’t dwell. We’ll always have hindsight to show us where we’ve gone wrong but there’s absolutely nothing you can do about. Instead of fixating on the past, learn from it. Don’t repeat the same mistakes. Then you can focus on making the most of your future.
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