To say that many real estate investors are unprepared when they get started is an understatement. Far too many people rely on filling their heads with hypotheticals and booksmarts—which is absolutely a good thing to do—but they forget to take the practical steps that put them in the best possible position from the very beginning.

Real estate investment is a little bit like playing chess. You can’t capture the queen and win the game without setting up the board to make the right moves. It takes careful calculation to get there!

You can have all the head knowledge in the world of how real estate investment should work, but unless you do the work of getting there, no matter how passive you think you are, you’re never going to find the degree of success you want.

The bad news? Action can be scary. Being definitive? Scary. It’s taking a leap, sometimes into the unknown. The good, though, is that it’s all for forward momentum. When you cast off the fear of making mistakes and move from theory to practice, you’re going to get the experience that turns you from a real estate investment novice into a seasoned expert.

If you’re ready to invest, these are the steps you need to take right now to ensure you have a solid footing.

New investors, no matter where they’re starting out, have a massive learning curve if they want to be successful. It’s true—there’s a ton to know before you can really dive in. If you want to find success in real estate investment from the get-go without making a lot of costly mistakes, there’s a foundation that must be laid from the very beginning.

8 Fundamental Concepts for New Investors to Master in the Beginning

Ahhh. There’s nothing like a shiny new year to reinvigorate the spirit! Even if your 2015 was less-than-satisfactory, now is the time to start the year off on the right foot. To dust yourself off, renew your resolve, and get sh...., umm, get stuff done!  (Kerry Espuga would be frowning at me right now for using non-words like umm!)

If this is the year you’ve chosen to make the leap into real estate investment, great! If you’re a brand new investor, you’ve got a lot of work to do. Some of the biggest mistakes you can make will be right here, in the beginning.

So whether you are experienced or new, there are some steps you can take right now to start your passive investment path on the right foot.  We’ve got a few words of advice here and hope this helps you get going:

Generating passive income sounds amazing in concept, doesn’t it? Income. Passive. Knowing that without expending too much time, effort, and energy, you could be racking up the cash to cover your retirement, or that trip to the Bahamas you’ve been dreaming about. Passive income comes in many shapes and sizes. Now more than ever, there are a million different ways to start generating passive income.

And real estate investment, in certain forms, is one of them!

It all depends on how you choose to invest. Investing in real estate can be a great avenue to financial security and freedom, but would-be investors need to be wary of the myths and misconceptions surrounding earning passive income through real estate.

For investors just starting out, everything can be more than a little overwhelming. Your financial future is something to be excited about, but there’s never a shortage of apprehension. There will be days when you ask yourself what you’ve gotten yourself into! It’s a little daunting to look at the success of other real estate investors, which can be both inspiring and intimidating.

In the beginning, your goals will either seem out of reach, or you’ll be expecting to reach them overnight. Neither is true: but with the right mindset, persistence, and dedication, you’ll get closer and closer to achieving the goals you’re after. 

Want to know a good place to start? Here it is.

There are three primary points to consider before changing things up:

1. As an investor, ensuring excellent customer service for your tenants is key to growing a positive reputation.  You will never make 100% of the tenants or even applicants happy 100% of the time.  However, put the effort in to hit that mark.  It will make it a lot easier to ignore the few who decide a nasty online post is their best route....whether it is truthful or not!

2. Many renters live paycheck-to-paycheck and value flexibility in paying rent.  This is a new reality and landlords as well as property management companies need to creatively figure out flexible payments.

3. Grace periods, though helpful to tenants, can promote bad habits.  Bad habits are the last thing you want to promote in a tenant!

With these in mind, consider: how can you innovate in how tenants pay their rent and improve customer service without extending too-lenient grace periods?

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There’s a certain unique energy to investors when they’re starting out for the first time. One of my favorite parts of working with so many investors or participating on real estate investing forums like BiggerPockets.com is getting to interact with new investors.  The potential for positive cash flow and passive income are sweet, sweet images to consider. It’s easy to real estate investors to be excited about their opportunities in the beginning. It’s hard work, but it’s new, challenging and exciting.

There’s an irreplaceable je ne sais quoi to it all.

Investing in real estate has always been a different beast in comparison to other kinds of investments. After all, real estate is tangible. Real. You can own it, walk through it, see it. It’s not theoretical, it’s concrete.

That, among other reasons, is why so many people have chosen real estate as their source for passive income throughout the years. But is it still true? Through recessions, housing bubbles and market crashes, does real estate still hold up?

Well, it looks like it does.

Where real estate investment is involved, the options are virtually endless. After all, there are markets all over the country (and the world) in which to strategically build up passive income. Some investors favor big, glamorous markets while others are content with single-family homes in less lauded areas.

We often hear these markets described purely in terms of their city. Houston. New York. Los Angeles. Boca Raton. But as we all know, cities and markets are not uniform. There are variations in neighborhoods and communities that we need to pay mind to when looking to purchase an investment property. A safe neighborhood, after all, is absolutely key to your success. If you tenants feel unsafe in the area, chances are you won’t be keeping them for long. Safety isn’t the only criteria in a good investment property, however.

Before you buy, there are  many factors to consider about your neighborhood of choice: namely, local amenities and attractions that can make you property prime real estate.

For most people, saying “renter” will bring up a particular image. Twenty-somethings, singles, young families — people who, essentially, can’t afford to buy their own home yet. While they, along with college students, make up a significant portion of renters, they are far from the only ones.

In fact, there’s quite the number of Baby Boomers turning to renting in their sunset years. Enough that real estate investors would do well to investigate. Marketing with Baby Boomers in mind in the right places may just give your investments a boost.