Do successful investors prefer properties in perfect condition or that need fixing up? Do they like residential or commercial, downtown or in the suburbs, manufactured, brick or wooden frames, exteriors painted brown or gray?
While any of these choices may describe a particular individual’s comfort zone, the true investor treats the physical property as a secondary issue. He’s not interested in buying the property but in buying the property’s anticipated economic benefits – bottom line, the income stream.
Successful real estate investors don’t make a decision to buy, hold, or sell based on emotional factors. In particular, don’t buy a building because you’ve fallen in love with it; and don’t hold because of sentimental attachment when you really ought to sell. If you need that warm and fuzzy feeling, get a puppy.
Of course knowing what’s going on in the vicinity of the property or its surrounding areas (like Tesla building the largest manufacturing plant in the world 14 miles from Reno) will certainly have an effect on the demand for an increase in certain types of properties like multi-family.
The prudent investor seeks a return on investment. To achieve that return, he has to look at the numbers carefully – at the current financial data and at reasonable projections of how the investment will perform in the future. That means gathering facts, doing your homework, knowing what’s really going on and recognizing that information becomes your most valuable commodity. The consequences of doing less can be quite costly and unpleasant. That’s what this game is all about: using your best judgment, based on the best facts you can gather about the market and paying for the best advice before making your decision. Remember it’s your money on the line, so, good or bad, you are responsible for your own decisions.