So what are your superpowers? I like the word. I watched a movie where Spider-Man, asks Batman, what is your superpower? And he answers, “I am rich”. That is the superpower I would like to have. Superpowers are another name for skills. So what types of skills do you need to become a successful real estate investor? There are two types of skills in life, hard skills and soft skills. Hard skills are the ones you have to acquire by learning or doing an amount of work to achieve like carpentry, construction, typing or languages.
In most cases, people will either study, become an apprentice or take a course, degree or diploma to acquire a hard skill. A soft skill, on the other hand, is one based on your character and emotions, like kindness, perseverance, patience or tactfulness. I have employed both sets of skills in my career, and in this blog, I will advise on the skills required to become a successful real estate investor.
Here are the superpowers that you are going to need the most:
1. How to analyze a property. The main factors you need to understand when evaluating a property include costings. What you need to take into consideration to make a profit or when renting how to be cashflow positive. Location, price and facilities are also important things to consider.
2. How to renovate. This is probably the hardest one to get right, particularly if you do not have experience in the construction sector. There are many variables to consider and you need to know exactly what to ask for when receiving a quote from a contractor. Renovations are notorious for going over budget because people did not allow for unseen contingencies. Do your homework and make sure you know the full costs of a bathroom, kitchen or bedroom refurbishment with labor and materials costs included.
3. How to manage a project. Organization and time management skills are key in property development. Doing everything by yourself can be overwhelming as there is so many things to manage. Knowing the best sequence and time to book tradespeople around their availability to do certain jobs is very important. The level of detail here is high and the longer the property is lying idle the less money you make. Employ the electrician before the plasterer and lay the carpets and furnishings after the painter and carpenter is finished. These are efficient aspects that sound logical but many rookies make the mistake not to sequence them in the right order. Some tradespeople need supervision others don’t so you need to be on site to micro manage and know how long each trade takes to complete an area. Sometimes contractors may not be available right after another finishes so you may loose time and time is money. If project management is not your forte, then I strongly advise you hire a project manager or contractor to co-ordinate everything.
4. Understanding local laws and building permits. Be aware of the local laws and building regulations in the area that you choose to invest in. The reason is that it will save you a lot of time and trouble. Securing administrative and permit permissions can really delay a project due to a variety of factors. Adhering to local planning laws and restrictions on height and materials that you can use and waiting for inspections to sell a property are essential information you need to comply with before you spend a penny.
5. Persistence Skills. This is a key skill to possess as property is a long term investment and learning curve. Each day and with every project you will learn something new. The laws, the delays, contractors, and so on. So its very important to have persistence and learn how to overcome obstacles and move on.
6. Communication and active listening skills. Believe me; this is one of the things that will get you very far. If you listen to the seller and identify what they really want or need and why they’re selling. Ask the pertinent and relevant questions and use your communication skills and personality to get the best deals.
7. Negotiation skills. When you actively listen and communicate personally it can save you money. A seller may lower their price if the house is sold to a family as a home rather than individual renters. If you understand what the other person wants, then you have something to work with. Negotiating is something that you’re going to do over and over again. You’re going to deal with sellers, you’re going to deal with realtors about their commission, you’re going to negotiate with contractors about their time and money. So that’s a super skill to have.
8. Tactfulness skills. If you are tactful, you possess a skill for saying the right thing at the right time. A tactful person is reasonable and sensitive, not rude or careless and this goes a long way when dealing with uncomfortable situations. How do you communicate unpleasant things to someone and still be friends especially when you are evicting tenants or asking someone to leave their home after you purchased it at auction. Its not an easy thing to do. You will also have to deal with contractors not meeting deadlines and how to resolve and fix problems.
These are the skills that I have identified you will need when investing in real estate. If you do not have all of them, I encourage you research them or better still hire people who do possess the relevant skills, they will save you a lot of time, frustration and money. My primary skill is in organization and project management but I recognize when I need help in other areas so I know who and when to ask for help. I hope this blog help on your real estate investment journey and if you require any more information or assistance I am here to help.
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