I have met thousands of real estate investors over the last 10 years. One of the key pieces of the success that I have witnessed in the most successful of these real estate investors is their ability to be proactive rather than reactive. The proactive person is somebody who knows that a problem will occur, but it comes up with different processes and systems to deal with that problem. A reactive real estate investor deals with problems as it occurs.
All housing markets move in a cycle over time from boom, slump, and finally to recovery. A proactive investor realizes that specific strategies, work better, in a particular phase of the real estate cycle. For example, flipping houses and rent-to-own’s make sense in a booming market where appreciation is increasing quickly, but does not work well in a market that is slumping. Being able to know what phase of the cycle that the specific real estate market is in helps a proactive real estate investor to use the right strategy.
A proactive investor understands that interest rates will change, they will go up and they will go down, but have prepared to deal with each of these particular situations. They seek to understand how interest rates are determined, and see the upside and downside risks associated with various mortgage products. A reactive real estate investor is driven by fear. They see what the lowest interest rate is today and makes a decision based on that information solely, locking into longer rates in order to lessen their own personal anxiety.
A proactive investor understands how to leverage their risk of being sued by using insurance policies, corporations, and companies to spread their risk. A reactive investor gets sued and then tries to figure out how to deal with the situation.
Be a proactive investor and be in real estate investing for the long term.
Quentin D’Souza is the Chief Education Officer of the Durham Real Estate Investor Club. Author of The Property Management Toolbox: A How-To Guide for Ontario Real Estate Investors and Landlords and The Ultimate Wealth Strategy: Your Complete Guide to Buying, Fixing, Refinancing, and Renting Real Estate. And a Real Estate Investment Coach details at Real Estate Mastermind and Coaching
Quentin D’Souza is the Chief Education Officer of the Durham Real Estate Investor Club. Author of The Action Taker's Real Estate Investing Planner, The Property Management Toolbox: A How-To Guide for Ontario Real Estate Investors and Landlords, The Filling Vacancies Toolbox: A Step-By-Step Guide for Ontario Real Estate Investors and Landlords for Renting Out Residential Real Estate, and The Ultimate Wealth Strategy: Your Complete Guide to Buying, Fixing, Refinancing, and Renting Real Estate.