The arrival of a new year’s as good a time as any to start mapping out your long-term goals. As we close the book on 2020 and turn to 2021, it’s worth reflecting on the most effective strategies for investing in real estate. Although it’s a field that can reap high returns, it’s not one built on brash decisions — it requires patience as well as proper preparation and planning. Before diving into a new project headfirst, it’s always valuable to stop, take stock of your inventory, and be sure you’re making the savviest move available to you.

Here are A&S Capital’s five real estate investment tips for 2021:

1. Get in while the getting’s good and interest rates are low: It’s the start of the new year, which means people are just beginning to get back into the swing of things and shake off the dust from holiday break. This means there’s room for you to comfortably and confidently start 2021 off strong: The market is always slower in January, so there’s more space for bigger opportunities due to less competition. If possible, take advantage of the quiet, swing for the fences, and get ahead of the game. Multi-families are going to be the great segment of 2021, plus interest rates are historically low and will continue to be low. If there was ever a time to start working on your portfolio, it’s now.
   
2. Play to your strengths: Be honest with yourself about your assets and how realistic your goals are. You can optimize your return by being smart about what kinds of locations you invest in: If you’re a small investor, focus on duplexes, triplexes, fourplexes, and properties with up to five units. These are the best properties to start with because banks consider them single-families. For more advanced investors, don’t be afraid to look at working on luxury homes.
   
3. Portfolios are formed from consistency: It’s tempting to have wide eyes and indulge in your grandest ambitions when building a portfolio. However, it pays to be cautious and shrewd: Stick to your locations and areas of expertise. Concentrate on building your portfolio in one territory so you can take advantage of trends and retain control over your properties. It’s important to keep things centralized and not invest in different cities scattered in different regions.
   
4. Manage each project according to its needs: There is currently a lot of activity in the industry, meaning there’s also more demand for contractor services. Be sure to seize these opportunities by always padding your quotes for both time and money. Subcontractors are backed up, so be ready to change plans, orders, and budgets at a moment’s notice. Additionally, supply chains are slowing down, so anticipate operating with expanded timelines.
   
5. Always have an exit strategy: Because subcontractors are bearing a heavy workload right now, it’s crucial to always have a contingency plan in addition to padding your budget and timelines. You can secure a lead with a bridge loan, but as soon as you get it you need to start formulating an exit strategy: If the plan is to refinance as soon as you close, start working with a conventional mortgage broker on your file as early as possible. Alternatively, if you intend to sell, begin marketing on that property so you hit the ground running on the day that you finish. Don't lose any time at all.