Six Proven Real Estate Investing Principles • Kenneth Goh - Specialize in the sale and purchase of properties in Malaysia

Six Proven Real Estate Investing Principles

There are real estate investing "tricks" and techniques that you may know, or want to know. There are new ways of doing things that are worth learning. Knowing about the latest types of financing is another way can also help. Before all of these, however, you need to learn some basic principles. Here are six of them.

  1. Build relationships.
  2. Understand the numbers.
  3. Reduce risk.
  4. Be prepared.
  5. Set goals.
  6. Learn, and apply what you learn.

6 Proven Real Estate Investment Principles

Tip #1: Build Relationships

Real estate investing is about relationships. People are your most valuable resource, and the more of them you know, the more likely you are to find good properties to buy, or buyers for your properties. ask people for their names, and if your memory is poor, take notes. Know the right people too, including a real estate agent who gets many listings of the type you are interested in. Wouldn't it be nice if you were the one he called first?

Tip #2: Understand the Number

Know and understand the relevant numbers. When you look at a rental property, for example, you should be thinking about the income, the expenses, and the capitalization rate, or "cap rate." Imagine how certain changes would allow you to raise the income, and what that would do to the value. A "feeling" about a property, without understanding the numbers, gets many investors into trouble.

Tip #3: Reduce Risk

Look for and use methods to reduce risk. Have inspection, financing, and other contingency clauses in the offer, so you'll get your deposit back when a deal falls through. Consider your exit strategy before you buy, and have a "plan B." Value real estate using comparable or cap rates, not "hunches." Buy through proxies (eg: Sdn. Bhd). 

Tip #4: Be Prepared

Be prepared for real estate investing. Have business cards, pen and paper on you at all times. You never know when you'll see a property for sale, or hear about one. Sometimes, when you mention that you invest in real estate, sellers, buyers and other investors suddenly appear with information, opinions, and sometimes even good deals. Be prepared.

Tip #5: Set Goals

Create action-oriented goals, not just wishes. For example, require yourself to look at a certain number of properties per week, and maybe even to write a certain number of offers each month. Set goals for all sorts of little steps, like making six phone calls per week, checking online listings twice per week, and so on. Action creates momentum. Repeated action creates habits, and good habits lead to more successful real estate investing.

Tip #6: Learn, and Apply What You Learn

Keep getting educated, and using that education. Learning more from books, magazines and attend property seminar is a great idea, as long as you spend as much time doing something as reading about it. Some of us let the interest and enjoyment of reading about investing get in the way of actually investing. Good information is crucial, but it should lead to good real estate investing.

About the author

Kenneth Goh

My name is Kenneth Goh and author of this blog. This blog will share with you more about property knowledge, investment, internet marketing and technology. It is just about anything that is good to share. Do give your comment if you like or dislike this post and I will reply all of them. Thank You for your Visit. If you have any question, please feel free to contact me using contact form here.


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