In an effort to help you expand your knowledge on the industry, the New York Post chatted with three real estate experts to get the low-down on eight tips for experienced investors.
What did we consider an “experienced investor” for this article? At the very least, the individual has dabbled in real estate and wants to further level up — they probably own at least one profitable real estate investment.
“Commercial real estate investing is dominated by institutions. One reason is that investing in rental properties requires an amount of capital (money to spend) that many small investors lack,” said Paul Fiorilla, director of US Research at Yardi Matrix, a commercial real estate data and research company. “Another is that small investors – known in the industry as ‘retail’ investors – historically have a high failure rate.”
No matter how many properties you may own, we’re all human — so you’re bound to make mistakes. But here are eight tips to help you best avoid making them.
1. Understand The Local Market’s Trajectory
“Nothing lasts forever, so don’t just focus on the current amenities of a neighborhood and city when considering investment. Look to how it might change,” said Igor Popov chief economist at Apartment List. “Are recent movers or newly-opened businesses markedly different from established families and businesses? If so, the market may change quickly, and designing your own forecast will keep you from getting caught off guard.”
Fiorilla also mentioned the importance of investors having expertise in the segment they’re investing in.
“Obtaining market data is vital. Property investors should have a thorough knowledge of the potential pitfalls [and] understand property management,” Fiorilla said. “Be well-versed in fundamental supply, demand factors and the economic drivers of the submarket.”