6 Must-Have Skills for Real Estate Investing Success

Summary: Real estate investing requires more than just buying and selling properties—it demands strategic thinking, financial literacy, and risk management. This article explores six must-have skills that can help investors maximize profits and minimize risks.

Ever wonder how some investors always seem to land the best real estate deals? It’s not luck—it’s skill. Real estate investing skills help investors spot opportunities, avoid bad deals, and grow their wealth over time.

Whether you’re just starting or looking to sharpen your edge, mastering a few key skills can make all the difference. And these skills aren’t reserved for the expert investors—you can develop them too.

Let’s break down six real estate skills that can help you make smarter investments and build lasting success.

1. Understanding the market

Being good at real estate investing starts with knowing the market. You need to understand both national and local real estate trends to make informed investment decisions.

• Follow national trends: Monitoring housing demand, interest rates, and economic indicators is essential.
• Evaluate neighborhoods: Look at factors such as job growth, school quality, crime rates, and planned developments to assess a neighborhood’s growth potential. Notably, large metro areas like New York City experienced population growth due to increased immigration, impacting housing demand and investment opportunities.²
• Utilize data analytics tools: Online real estate platforms, such as Zillow and Redfin, offer insights into pricing trends and property values.

2. Knowing your finances

Real estate investing is all about the numbers. If you don’t understand how to evaluate an investment financially, you’re taking a huge risk. Here are a few things you need to understand to analyze returns, assess financing options, and manage cash flow effectively for real estate investment success.

• Return on investment (ROI): This measures the overall profitability of an investment. A good ROI in real estate investing typically falls between 8% and 12% annually.⁴
• Capitalization rate (cap rate): This determines a property’s return relative to its purchase price. The national average cap rate for multifamily properties was 5.5% in 2024.⁵
• Cash flow: This refers to the money left after paying all property expenses. Positive cash flow means your property generates more income than it costs to maintain.

Exploring financing options

Not all investors have the cash to buy properties outright. You need to have the right financing strategy. Here are some options:

• Traditional mortgages: Fixed- or adjustable-rate loans from banks or credit unions.
• Private lending: Loans from individuals or companies, often with flexible terms.
• Hard money loans: Short-term financing with higher interest rates, commonly used for fix-and-flip projects.
• Seller financing: The seller acts as the lender, allowing buyers to make direct payments over time.
• House hacking: Buying a multifamily property, living in one unit, and renting out the others to offset mortgage costs.

3. Making deals

In real estate investing, making the right deal is about negotiating and securing the best terms with sellers, lenders, and contractors. You can save thousands of dollars and achieve long-term success if you master these skills.

• Price negotiation: Sellers often list properties at prices that leave room for negotiation, so doing your research gives you an advantage. Be sure to check recent sales of similar properties in the area to help you understand the fair market value of the property you want to purchase. If a property has been sitting unsold for a while or needs repairs, that can be used as leverage to negotiate a lower price. Sometimes, offering better terms—like a faster closing or fewer contingencies—can help you win a deal over a higher offer.
• Financing terms: A lower interest rate, better loan structure, or reduced fees may mean the difference between a property that generates great cash flow and one that barely breaks even. Shop around for the best mortgage rates by talking to multiple lenders. Whether you are working with private lenders or seller financing, proposing creative solutions can benefit both sides.
• Building relationships: Great deals often come from connections not listed publicly. In other words, building relationships with real estate and other investors can lead to great opportunities. A simple conversation with a seller can uncover flexible terms or financing options. The stronger your network, the more likely you are to find (and close) great real estate deals.

4. Managing properties

From handling repairs to dealing with tenants, effective property management is one of the most essential real estate investing skills. Whether you manage your properties yourself or hire a professional, you need a plan to help you avoid stress and keep operations running smoothly.

• Managing tenants: Screening potential tenants carefully, including credit checks, income verification, and rental history, can help you avoid issues down the line. You also need easy-to-understand lease agreements, offer timely communication and give prompt responses to maintenance requests to create a positive rental experience.
• Handling maintenance and repairs: Things break—sometimes at the worst possible times. Keeping up with routine maintenance can prevent small issues from turning into costly repairs. Setting aside a portion of your rental income for unexpected expenses ensures you’re not caught off guard. Many investors build a network of reliable contractors or work with a property management company to handle repairs efficiently.
• Using property management tools: Today’s technology makes property management easier than ever. There are several good platforms that can help you automate rent collection, track maintenance requests, and communicate with tenants. If you own multiple properties or don’t want to deal with daily operations, you can hire a professional property manager to help you keep everything running smoothly.

5. Managing risks

Markets fluctuate, and unexpected repairs can hit your cash flow. Smart investors prepare for potential risks ahead of time.

• Market downturns: Real estate markets go up and down, and there’s no way to predict the future with 100% certainty. But you can prepare for downturns and slow rental periods by:
  • Keeping an emergency fund to cover mortgage payments when your property sits empty.
  • Spreading your investments across different locations and property types to reduce risk.
  • Choosing properties in high-demand areas where vacancies are less likely.
• Handling legal and financial risks: One bad tenant or a poorly written contract can cost you thousands. Staying informed and having the right protections in place can help you minimize both legal and financial risks. Other things to keep in mind:
  • Make sure you understand local real estate laws and tenant rights.
  • Have a real estate attorney review your contracts before you sign anything.
• Protecting your investment with insurance: An unexpected disaster, like a hurricane or tornado, can result in catastrophic loss. A solid insurance plan gives you peace of mind and financial protection:
  • Landlord insurance covers property damage, lost rental income, and liability claims.
  • Liability coverage protects you if someone gets injured on your property.
  • Umbrella insurance gives extra protection in case of big legal claims, especially if you own multiple properties.

6. Continuous learning

Real estate is a dynamic field. Investment strategies that worked yesterday might not work tomorrow. If you want long-term real estate investment success, you need to stay informed and be adaptable.

• Staying ahead of market trends: Real estate isn’t static—interest rates change, housing demands fluctuate, and economic shifts impact property values. Try to keep up with where the market is headed to help you make better investment decisions. From short-term rentals to commercial properties, be willing to implement other investment strategies as the market changes to help you maximize your returns.
• Learning from others: No investor has all the answers, but the best ones never stop learning. You can sharpen your real estate skills by:
  • Networking with experienced investors: Real estate groups, conferences, and online communities are gold mines for insights and advice.
  • Taking courses and certifications: Learning about finance, property management, and negotiation can give you an edge.
  • Analyzing past deals: Every investment—good or bad—teaches valuable lessons for the next one.
• Adapting to new technology: Real estate investing has gone digital. There are many great technologies to help you analyze properties, manage rentals, and streamline finances:
  • Artificial intelligence or AI-driven property analytical tools can help you evaluate deals faster.
  • Property management software makes tracking rent payments and maintenance requests easier.
  • Virtual tours and digital contracts speed up transactions and improve tenant screening.

Set yourself up for real estate success

Real estate investing is about making smart decisions that lead to long-term success. Top investors know how to handle market changes, increase profits, and safeguard their investments.

By improving your real estate skills, you’ll feel more confident to find opportunities, negotiate better deals, and build a lasting portfolio. The more you learn to use these strategies, the more they will help you achieve real estate investment success.

Mutual of Omaha offers financial tools designed to help investors safeguard their assets and plan for long-term growth. Want professional guidance on protecting your investments and building wealth? Speak with a financial professional today to create a strategy that sets you up for success.

Frequently asked questions

Q1: What’s the most important skill for real estate investing?

There’s no single answer, but if you had to pick one, understanding the numbers is important. If you don’t know how to analyze cash flow, ROI, and cap rates, you’re basically guessing. That said, market research and negotiation are just as important—buying right is half the battle.

Q2: How can I get better at negotiating real estate deals?

The best negotiators do their homework. Know the property’s value, understand the seller’s motivations, and always have a plan before making an offer. Also, the more deals you do (or even just analyze), the better you’ll get. Relationships matter too—good connections with agents and lenders can open doors to better opportunities.

Q3: How do I handle risks like vacancies or market downturns?

A little planning goes a long way. Keep a financial cushion, screen tenants properly, and don’t overextend yourself with risky financing. Investing in areas with steady demand helps too. And if the market shifts? Stay flexible and adapt your strategy—there’s always a way to find opportunities.

Q4: Is real estate still a good investment in today’s economy?

Absolutely—if you play it smart. The market has its ups and downs, but real estate is still a solid way to help build long-term wealth. The key is to stay informed, focus on value, and make data-driven decisions rather than chasing trends.

Disclosures:

Registered Representatives offer securities through Mutual of Omaha Investor Services, Inc., Member FINRA/SIPC. Investment Advisor Representatives offer advisory services through Mutual of Omaha Investor Services, Inc.  Mutual of Omaha Advisors is a division of Mutual of Omaha Insurance Company.

Real estate investing can be subject to a number of risks including but not limited to general market risk, liquidity risk, credit risk, structural risk and leverage risks. The strategies mentioned may not be suitable for everyone.

All investing involves risk, including the possible loss of principal, and there can be no assurance that any investment strategy will be successful.

Mutual of Omaha and its representatives do not provide tax and/or legal advice, and the information provided herein is general in nature and should not be considered tax and/or legal advice.

Not all Mutual of Omaha agents are registered representatives or financial advisors.

Sources

1. The Wall Street Journal, New Census data shows rising immigration rates in the U.S., March 2025
2. Zillow, United States Housing Market
3. Fannie Mae, Multifamily Economic and Market Commentary, August 2024

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