Real estate offers a variety of investment opportunities, from real estate investment trusts (REITs) to individual properties. But what sets apart a good real estate investment? The answer may surprise you.
According to Grant Cardone, a successful American businessman and real estate investor with a net worth of $600 million, there are two key factors that contribute to a successful investment: the deal itself and the potential exits.
In a recent discussion on the Business Breakdown podcast with Brian Bandell, Cardone emphasized the importance of focusing on the quality of the property when considering an investment. He suggests that 80% of the decision-making process should be based on the property’s location, future potential, and branding opportunities. Assessing factors such as centrality, rental appeal, and branding influence can significantly impact the property’s value and tenant retention in the long run.
When it comes to exits, Cardone stresses the significance of understanding the potential returns and value appreciation of the investment. Having multiple exit strategies can enhance the overall success of the investment. Cardone’s $5 billion real estate portfolio is a testament to his strategic approach in maximizing value through various exit options, such as cash flow generation, property development, and leveraging cryptocurrency assets.
By focusing on the quality of the deal and planning for diverse exit strategies, investors can increase their chances of success in the competitive real estate market.
Diversifying your approach to generating profits can vary, but the key is to have a clear strategy in place from the start. The type of property you choose is also crucial to your success.
Location is often emphasized in real estate investing, a sentiment echoed by Grant Cardone. However, the property type is equally important. According to Jose Hernandez, a Real Estate Broker at Coldwell Banker, “Location is crucial because while you can renovate a property, it takes time for a neighborhood to evolve. The type of property also matters. For instance, if you invest in a condo in a family-oriented neighborhood, it may be challenging to attract tenants who prefer single-family homes.”
Alternatively, selecting a property in a popular area that requires updates can prove to be a lucrative investment, especially in the residential real estate sector such as single- or multi-family homes. “These properties are like gold,” Hernandez emphasized. “By renovating them, you can command higher rental rates.”
While rentals are a popular choice, Grant Cardone suggested exploring other investment options like healthcare for their potential for high returns.
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