10 tips for success in real estate :Real estate’s a job, not a hobby
- “Many people who enter real estate do so with a lot of zeal, but fail to build their investment portfolios past their first land purchase. I even advise my clients to avoid the property sector if necessary, as it is not always as glamorous as it might seem on the surface,” he says.
- Mr Daniel Ojijo started working in real estate 20 years ago as a part-time house-letting agent. However, he discovered that for him to fully realise the profits that he intended to in the property market, he needed to pursue it as a full-time career.
- If such a home owner chooses to bypass professional realtors and decides to engage the potential buyers on their own, they not only risk being conned, but also selling the house at a price that’s far much lower than the current market prices.
Mr Dennis Wanjala’s job as an investment manager typically requires him to sit down with his clients and discuss possible avenues through which they can invest their money. He say that in the recent past, most of his clients have been keen on putting their money in real estate rather than in other enterprises such as setting up retail stores, for instance.
“There’s a perception that with real estate, one can never go wrong,” he says. “Many people with spare money to invest fancy property because of its (perceived) hands-off approach when it comes to management. This enables them to engage in other activities while passively earning additional income from their property investments,” he offers.
The economist, who runs Bungoma-based Tender Heart Financial Solutions, adds that the sharp increase in the price of land has played the leading role in attracting Kenyans to real estate. He says land is no longer viewed from the economic point of being a factor of production. Instead, people buy land which they do not develop but simply sit back and wait to sell later at handsome profits.
However, as Mr Wanjala has learnt in the past decade that he has worked as an investment advisor, the practical aspect of trading in real estate is far less glorious than the theory.
“Many people who enter real estate do so with a lot of zeal, but fail to build their investment portfolios past their first land purchase. I even advise my clients to avoid the property sector if necessary, as it is not always as glamorous as it might seem on the surface,” he says.
So howhave some people achieved tremendous success and become real estate magnates,while the majority of investors end up burning their fingers as soon as they dabble into the trade? When it comes to buying and selling real estate, what separates the wheat from the chaff? Alongside Mr Wanjala, DN2 spoke to other industry players in an attempt to find out the habits and qualities that propel novices to the top of the industry. Below are 10 tips that make for an effective real estate investor:
- Treat real estate as a career, not a hobby
Mr Daniel Ojijo started working in real estate 20 years ago as a part-time house-letting agent. However, he discovered that for him to fully realise the profits that he intended to in the property market, he needed to pursue it as a full-time career.
“I decided to quit my job as a patent officer in the Ministry of Science and Technology and formed a real estate company,” Mr Ojijo recalls. He has never regretted that decision because today, he is the managing director of Homes Universal, a conglomerate under which are registered close to a dozen real estate companies, including Villa Care Kenya, Sigimo Enterprises and Kenya Homes Expo.
Mr Simon Ng’ang’a, who, like Mr Ojijo, quit a well-paying job to take his chances with real estate, is now the CEO of a fast-rising property and financial solutions company, Granite Capital.
“With real estate, there’s always a huge amount of money changing hands and this can never be treated casually. One also needs to sit in meetings with potential clients and handle endless negotiations. All these require a lot of time and cannot be treated as just a hobby,” Mr Ng’ang’a offers.
- Develop a niche and know it well
According to Mr Ng’ang’a, people often fail in real estate because they enter the field when they are still not sure about what to specialise in. Consequently, they fumble about in the dark attempting to be Jacks of all trades, only to end up frustrated. Real estate, the Granite Capital CEO says, has several areas such as dealing in vacant land, wholesaling, real estate investment trusts (REITs) and flipping. A potential investor needs to carefully select one niche and pursue it. This, Mr Ng’ang’a says, will make it easy for one to gain in-depth knowledge of that particular field and hence help them to stay ahead of the competition.
“When I started Granite Capital, I had a vision of mainly focus ing on providing structured financial solutions to property owners and buyers.
“ I learnt everything pertaining to real estate financing in the country and that is how my company has remained strong over the years,” Mr Ng’ang’a reveals.
- Don’t expect to get rich within a short time.
“I have noticed that many people looking to get into real estate nowadays have no patience to persevere and grow reputable businesses,” points out Mr Daniel Ojijo. “They always want to start investing today and reap millions tomorrow, oblivious of the persistence that the industry requires.”
Mr Simon Ng’anga adds that people in the real estate sector are usually smart and can easily detect those in the game who are just looking to make a quick buck.
“These are people who transact millions of shillings, they are not too dumb to notice that the person they’re dealing with has not done enough research in their field and would bolt if they detected, for instance, that you don’t even have a physical address.”
- Develop good networks
All successful realtors, Mr Ojijo says, build around themselves a network of high-value individuals in the industry. Since he served as the founding chairperson of the Kenya Property Developers Association (KPDA), Mr Ojijo realises the importance of realtors working together even though they are in competition with one another. He says that he has been able to build a large investment portfolio because acquaintances in his circle often ask to partner with him.
“One of the reasons why I started the Kenya Homes Expo was to help the different players in the sector interact and forge affiliations,” Mr Ojijo says.
Meanwhile, Mr Ng’ang’a attributes the successful run of Granite Capital to partnerships with established real estate companies.
“For example, we have partnered with Cytonn Investments, for whom we market property. The partnership with Cytonn has given us access to its huge clientèle base, thereby catalysing our growth,” he says.
However, he cautions against partnering with a company before performing a thorough background search on it. He says it is important to conduct such a search to avoid getting into a partnership with a dubious organisations that can sully one’s reputation.
- Know when to consult professionals
According to Mr Wanjala, many people who venture into real estate initially want to do everything by themselves, without engaging professionals such as realtors, lawyers, property valuers and building contractors. This is usually in a bid to save costs, as the common perception among average investors is that professionals charge a lot for their services.
However, Mr Ng’ang’a argues that this perception could not be further from the truth and goes on to give the example of a person looking to sell their home. If such a home owner chooses to bypass professional realtors and decides to engage the potential buyers on their own, they not only risk being conned, but also selling the house at a price that’s far much lower than the current market prices. Further, the house might remain on the market for much longer because the seller misses out on the opportunity to advertise it to the realtor’s viable clientèle base.
- Be honest and ethical
During the State House Summit on Land that was held on Monday this week, an issue that was said to be a sore point by many stakeholders was the high level of deceit when it comes to land dealings in the country. It seems con men have been having a field day selling land whose titles are either forged or non-existent. This has made Kenyans generally sceptical when it comes to trading in real estate.
“When one joins the real estate field as an investor, opportunities to make an easy buck under the table will surely arise. Honesty is such a rare virtue in this field that the few of us who possess it stand out as giants and market leaders,” says Mr Ng’ang’a.
Meanwhile, Mr Ojijo says high ethical standards are crucial ingredients for his success.
“I have always tried to put the customer’s interests first in all my dealings. This has helped me retain clients for years, as I have clients whom I did business with 20 years ago calling to thank me. When you’re honest, word gets around fast and people keep referring new customers to you,” he says.
- Embrace technology
That technology evolves rapidly is common knowledge but what Mr Ojijo has learnt is that it is up to the investor to adapt in tandem with the technological changes or let their business sink.
“We have stayed above the competition because at Villa Care and Homes Universal, we are always looking to infuse the latest technology into our operations. For instance, we use a cloud-based system of management that can instantly be accessed anywhere by our agents, clients and home owners,” he reveals.
Meanwhile, Granite Capital channels almost its entire marketing budget to social media platforms. Digital marketing, Mr Ng’ang’a points out, is the future of real estate marketing because the majority of their buyers fall between the ages of 30 and 45, who social media a lot.
- Develop good communication and negotiation skills
The property industry is all about communicating with potential clients and convincing them to sign along the dotted line. Both Mr Ng’ang’a and Mr Ojijo aver that clinching a deal relies heavily on the art of conversation, which is not usually an easy concept to grasp.
“I always asses people’s communication skills before entering into any business partnerships with them. Real estate is all about selling, and selling needs superb communication skills that sometimes cannot be learnt in school,” Mr Ojijo says.
“I have seen deals worth tens of millions collapse just because of a mere Sh100,000. This points to poor negotiation skills on the part of the realtor, who is supposed to be the link between the seller and the buyer. A realtor should have an inborn ability to bring two opposing parties to the table and make them reach a common ground,” adds Mr Ng’ang’a.
- Keep your emotions in check
A serious error that Mr Wanjala has witnessed many people make is buying property at inflated prices simply because they’ve “fallen in love” with it.
“I ask my clients to make purchases based on facts and figures, not emotions,” he says.
He further advises that before one buys property, they should seek expert valuation and never pay a cent above the valuation price. When entering into a joint venture partnership with others, they should do so based on the other party’s competence in handling real estate matters as opposed to appeasing close friends and relatives. If possible, avoid getting into deals with close relatives.
- Keep yourself informed
In order to adapt to the ever-changing political landscape and economic trends, one needs to constantly keep abreast of new developments in real estate. Mr Ojijo confesses to being an avid reader of property magazines and a voracious consumer of political news.
“The decisions that politicians make always end up affecting the property sector in one way or the other, he says.
Being constantly informed also helps one to keep up to date with national laws, county regulations and emerging trends.
Mr Ng’ang’a, Mr Wanjala and Mr Daniel Ojijo all agree that any aspiring real estate investor who closely follows the above-mentioned tips can achieve their goals faster.
“All in all, the property scene is profitable for those who are willing to work hard, be diligent and seek as much knowledge as possible about the industry,” concludes Mr Ng’ang’a.
Source: Daily Nation