Five elements of the strategic real estate investor

With the proven performance of the real estate market in recent years, more and more Canadians are considering becoming investors. The challenge, however, is understanding what drives a market – what really matters and what doesn't. It's important to understand what's involved in becoming a strategic real estate investor – one who can make sense of the often confusing signals the market sends out, and who can see through the myths and misconceptions perpetuated by uninformed "experts."

You need to learn the five essential elements of the strategic real estate investor. It takes commitment – commitment to taking strategic action regarding your real estate portfolio, to being deliberate when interpreting confusing market signals and taking responsible action to insure the risk is minimal and the positive outcome maximized.We all know we aren’t capable of changing the market, but a difference lies within the strategic investor. The strategic investor acknowledges this fact and makes subtle changes in their tactics in response to these imminent market shifts.

The Five Essential Elements of the Strategic Real Estate Investor:

Mindset

Mindset is the essential base element of the strategic investor pyramid. It is the foundation for understanding real estate cycles, and strategic investors have a very distinct mindset: they think differently from other investors. They think strategically. This ability to weigh many options and outcomes and make informed decisions in their own best interests is what sets them apart from the rest of the pack.

Real estate cycle

Investors must know, study and understand how the Canadian real estate cycle performs and how to read it. If they don’t, investment decisions could be based on market influencers, rather than market drivers, which could be a dangerous oversight. Those who invest and analyze based on influencers often end up surrounded by chaos, emotions and a tough financial state. Those who invest based on the drivers are the investors who always come out ahead. Which would you like to be?

Goals

Strategic investors are fully committed to themselves. They enroll in a set of realistic goals, taking into account the phases of the real estate cycle, their target market’s underlying economics and how much time and capital they realistically have to invest. Then they make things happen.

Strategy

From their commitment, strategic investors focus on the strategy that will keep them true to themselves and their overall goal. Strategic investors use only specific strategies to create and sustain wealth throughout the inevitable cycles of the real estate market. They analyze key drivers, and adjust their tactics to account for market influencers.

Tactics

The strategic investor does not confuse tactics and strategy. Strategy forms the master plan. Tactics are the steps you take and tools you use to achieve the goals in your master plan. You adjust your tactics as market cycles progress – you do not adjust your goal or your strategy.