Real Estate Investor: Definition, Functions, and Tips [2022 GUIDE]

Read the functions of a real estate investor. Find out how to become a real estate investor and invest in the Dominican Republic.

Definition of real estate investor

A real estate investor is the figure who consciously deals with identifying real estate projects with high growth.

The process is based on the analysis of the property, real estate market, the environment, and other aspects, which will revalue the acquisition in the future. 

Let’s analyze the concept of investor as defined by the Cambridge Dictionary:

“A person who puts money into something in order to make a profit or get an advantage”.

As a result, we discover that the real estate investor’s objective is to make money with the transactions carried out in the real estate environment. 

Analysis of the environment: Dominican Republic 

The real estate investor must carry out a complete analysis of the property. 

One of the aspects that sometimes seems secondary is the environment of the property and the real estate development

For this reason, you should consider the following parameters: 

  • Socio-cultural profile: analysis of crime, social class and young people involved in the real estate market; 
  • Politics: the formation of the government and real estate decisions;
  • Economy: unemployment, GDP, risk and inflation;
  • Technology: R&D policy or technological resources;
  • Legislation, ecology, and ethical values.
Factors to consider before making and investment. Juri Franchi

In turn, investing in a Caribbean country such as the Dominican Republic has positive aspects such as: 

  • Economic and political stability: legal security and dynamism in the business sector make the Dominican region a stable economy in the Caribbean;
  • Access to various sectors, due to its geographical position: it is as an attractive destination for foreign investment and export of goods and services of world-class quality; 
  • Variety and richness of natural resources: beach, fertile soil, mineral deposits and warm climate.
Tourism. Juri Franchi

The country is recovering from the COVID-19 crisis, through tourism, as the Ministry of Tourism confirmes: 

“Last September was the best September for tourism in the entire history of the Dominican Republic, with tourist arrivals higher than in 2018, 2019, and 2020.” 

In total, 365,544 non-residents visited the Dominican Republic in September 2021. 

This figure is 14% more than in 2019 and 25% more than in 2020.

Functions of a real estate investor

The goal of the real estate investor is to acquire, hold, sell and view real estate investment opportunities for financial gain. 

A real estate investor has those functions to achieve its objectives: 

  • Research properties for sale;
  • Analyze property characteristics such as rates or geography;
  • Create and maintain a portfolio of clients;
  • Perform calculations to ensure that there is a possibility of return;
  • Adding value to acquired properties through space repairs;
  • Negotiate real estate transactions

The real estate investor must perform many functions to make his investment project profitable.

What is the difference between a real estate agent and a real estate investor?  

A real estate investor focuses on purchasing and maintaining real estate properties to make a profit on their sale.  

On the other hand, the real estate agent is a figure dedicated exclusively to the sale of the property. 

Therefore, the main difference between a real estate agent and a real estate investor is that the agent only makes the sale of a property.

On the other hand, the real estate investor is the one who carries out the purchase, renovation, and sale of the property.

With WLHRE‘s advice, investment opportunities expand.

Currently, its projects are basically dedicated to the development of projects in tourist areas of the Dominican Republic.

What training is required to become a real estate investor?

To become a real estate investor, you need specific knowledge.

The most common is to obtain a university degree specializing in economics, finance, or business administration.

Computer science, statistics, or mathematics can also be helpful.

In addition, it is also necessary to understand the market, with information and knowledge about its situation and changes.

Is it necessary to have a degree to become a real estate investor?

Although most real estate investors have a university degree, it is not indispensable to start investing in the real estate market.

You can reach the necessary basic knowledge in many other courses or training.

In general, it is necessary to know accounting, finance, sales, or business management.

For this purpose, you can choose different types of higher education.

Tips for real estate investors

If you want to start investing in the real estate market, you have to take into consideration the following:

  • Choose the market correctly, since you have to know what type of real estate you want to invest in and its economic situation;
  • Before making a purchase, draw the investment plan, with all that it entails (expenses, reforms, workers’ fees, etc.);
  • Know the current real estate market situation and its latest fluctuations; the more you know, the less margin for error you will have;
  • Buy at a low price, taking into account the current purchase and sale prices in the area you have chosen;
  • Try to maximize profits by increasing the value of the real estate in the sale;
  • Have an extensive network of potential contacts.

Making a great investigation and planning of the investment is the secret to having the minimum margin of error and thus not losing capital.

How can I become a good real estate investor?

To become an excellent real estate investor, you should consider the investment approach as the first step. 

Another critical factor is to know the economic and political situation of the city or country in which you will invest.

Contacting the best professionals such as WLHRE for the investment to be successful and constantly informed about the real estate market.

Where can a real estate investor invest in the Dominican Republic?

Investment in the Dominican Republic and real estate construction are increasing.

An example of this is WLHRE, whose most prominent project is Boca Paraiso.

The project has a modern architectural design developed by professional experts in selecting top-quality materials of European origin.

To carry out the real estate development, you must consider the construction requirements of the Ministry of Public Works and Communications of the Dominican Republic.

These establish that a structural evaluation must be carried out to request a construction license.

The Asociación de Constructores y Promotores de Viviendas (ACOPROVI) details the situation of the real estate sector in the Dominican Republic in its report

The largest housing portfolios are in the National District, Santo Domingo, and Santiago.

ProDominicana, the branding and marketing program of the Center for Exports and Investments of the Dominican Republic (CEI-RD), publishes the foreign investment flows in the country.

Flows of foreign direct investment. Juri Franchi

Since 2011, there has been an increase in foreign investment in the real estate market, reaching a peak of $587.3 million in 2016.

2020 closed with $446.7 million of investment, exceeding the previous year by $6 million.

Conclusions

In this text, I have introduced you to different characteristics and definitions of the world of real estate investment.

Therefore, we can draw the following conclusions:

  • The real estate investor must be aware of the economic, political, and social current affairs of the area where he is going to invest;
  • Minimum studies are necessary to be able to be a real estate investor;
  • Before investing, you must carry out an analysis of the real estate sector;
  • It is essential to create a forecast of expenses before investing;
  • Investment in the Dominican Republic is a trend that increases every year.

The figure of the real estate investor is becoming more and more popular among the American and Latin American population. 

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