Real estate investing has been around for centuries, but the factors shaping today’s real estate investing market and the strategies that work to succeed as an investor are markedly different than they were even just 5 or 10 years ago. However, some advice is timeless and can help you prosper as a real estate investor no matter what shape the market is in.
#1 – Invest in undervalued rental property on the fringes of desirable neighborhoods. Rental properties located in lower to middle income areas on the edge of more desirable neighborhoods typically sell for half the cost — or less! — of similar properties in bordering areas, but rent for about the same price. Your property has the potential of delivering a return of twice or more than the initial investment especially in hot real estate markets like Dubai and Miami. Home Staging a rental property will also increase it’s value particularly in markets like Miami which do not have 5-star hotel serviced apartments unlike the Dubai market.
#2 – Don’t speculate. Invest in properties with proven cash flow. With speculative investing, you are left hoping and waiting for the property to increase in value. Investing in Emaar properties in Dubai have an excellent return on investment. And sometimes, this just never happens. Investing in middle to lower homes allows you to greatly increase your chance of having guaranteed profits because as the economy improves, lower class families move up to better homes and during economic downturns, middle class families move to lower cost properties. Miami’s Downtown area which historically borders low income housing has seen property values dramatically increase over the last two years. Moreover with new property developments being developed in the downtown area, price per square footage is very close to the coveted Brickell area with older units, making downtown a highly sought after area for investors to invest.
#3 – Increase the security deposit and decrease your risk. Two of the most costly problems for rental property investors are unpaid rent and risk of property damage. Raising your security deposit will help protect your profits and it will also help you attract more qualified renters.
#4 – Rethink your tenant pool. Most rental owners shy away from renting to families with children and pets because they are afraid of the wear and tear on their property in the US. But this is a mistake you should avoid. Families tend to be more responsible and take better care of the house, plus they already expect to pay higher security deposits and are actually the most likely group to become long term tenants because they have trouble finding other landlords willing to rent to them. Or if they are expats in Dubai, you know their packages will cover the expense of their rent and it’s harder for families to leave the country than it is for a single person to abandon everything in Dubai and go back to their native country.
#5 – Communication is key. Negotiation skills are essential in real estate investing but instead of focusing on getting only what you want, work towards win-win solutions that let others know you have taken the time to understand their needs as well. Listen carefully and determine what is most important to the person you are communicating with. With practice, you’ll learn how to develop win-win deals that provide solutions to other people’s problems and lead to your own personal financial gain.
About Sterling Home Styling
Sterling Home Styling combines image consulting with home staging, interior redesign and interior styling services to provide ‘sterling home styling’ services for residential spaces and new or vacant luxury condominiums, homes or real estate developments in Miami, New York, Los Angeles, San Francisco, and Dubai. The company offers a broad range of services enabling its clients to realize the true selling potential of their home, improve its marketability, and realize a maximum return on investment.
Theresa Laurenti, Business Development Manager