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4 Essential Questions to Ask Before Investing in Real Estate

Fri, May 15, 2020

questionstoask-investinginrealestate-passiveinvesting-firsttimeinvestors-newinvestorsIn the midst of financial uncertainty, more and more articles are coming out about the opportunity that investors may be able to find in real estate in the upcoming months. Many of us remember the opportunities that were found in a foreclosure-ridden market during the Great Recession.

The COVID-19 crisis, according to some, is going to open up similar opportunities for investors due to the impact it will have (and is having) on the real estate market. Naturally, our first concern is not in capitalizing on these opportunities. We are first and foremost concerned with the health and safety of our residents, teams, and investors. 

So many of us, however, are facing financial fears amid the pandemic as much as we face health concerns. It’s only natural, then, that we think about how to stabilize and recover financially from the blow dealt by COVID-19.

Before you jump into the fray of real estate investment, there are a few essential questions you must ask yourself. After all, investing in real estate is not a bandwagon to jump on. It is a huge commitment you make for your financial future. 

So before you fall into the hype, you need to ask yourself a few essential questions.

Before You Invest, Ask Yourself…

Am I in this for the long haul?

In the wake of the Great Recession, we saw a slew of first-time real estate investors. As quickly as they flooded the market, they left. This is because those who jumped into the market, by-and-large, were only in for it while it was easy. After all, it’s not hard to make a profit on quality homes priced at bottom-of-the-barrel numbers. 

Fair-weather investors don’t see near the success, near the wealth-building rewards, as those who are in it for the long-haul. This is true of any investment, but it’s particularly true in real estate. Too many people see it as a way to get rich quick! The media, be it television shows or real estate gurus, make investing in real estate seem like the path to overnight success.

Make no mistake: effectively investing in real estate demands long-term engagement and effort. Are you jumping into the market because it’s the trendy investment of the moment, or because you are ready to commit to long-term, slow-and-steady wealth-building?

What strategy works best to achieve my goals?

There are a lot of different ways to invest in real estate. If you don’t know which direction to take, you have to, again, assess your long-term goals. Why are you investing? How active and involved do you want to be? For many, investing in real estate is a way to supply and sustain retirement. Because of this, many don’t want investing to be a hands-on, taxing experience.

Be sure to check out: Interested in Real Estate Investment? Target Your Best Strategy!

Not only that, but a hands-on, active real estate investing strategy demands that much more expertise on your part. Passive real estate investing, by contrast, allows you to leave much of your risk — the day-to-day operations — in the hands of seasoned professionals. At REI Nation, this includes not only your portfolio advisor but property management and renovation teams, too. Leverage the expertise of others for your own success!

Who should I partner with?

So you’re leaning towards passive real estate investing. You don’t want to fix n’ flip, you don’t want to be a landlord, you don’t want to spend time evaluating markets and neighborhoods or finding the right companies and contacts to renovate or manage your properties across different markets.

There’s a solution: a turnkey real estate provider, such as ourselves.

No matter what your strategy, who you work with is paramount to your success. Too many investors are willing to cut corners when it comes to management, renovations, and customer service. We have this misguided idea that saving money is always good. This causes us to lose more money in the long run when we compromise on what really matters.

Know your partners. Look at their track record. Get testimonials. Don’t allow cost to be the sole factor you weigh. Instead, looking to reputation first and foremost.

Where are my gaps in knowledge?

Listen: you don’t have to be an expert in all things real estate in order to invest successfully. A baseline of knowledge is important, though. In the beginning, you must take care to research and understand the method of investing that you want to pursue. You want to know what to expect of the process, the returns, the timelines, how to grow your portfolio, and where the best markets are to grow your investments.

Some of this research can be accomplished independently. The best way to not only understand the basics of real estate investing and grow in your knowledge is to partner with the right turnkey provider. REI Nation not only helps you find, finance, and own investment properties, but you have access to your own portfolio advisor who helps you stay informed, on track, and confident in the decisions that grow your wealth.

Start investing the right way. Talk to your personal REI Nation advisor today!

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Topics: new investors

Chris Clothier
Written by Chris Clothier

Entrepreneur, writer, speaker, ultra-endurance athlete, husband & father of five beautiful children. Chris puts these natural talents on display every day. As a partner at Memphis Invest, Chris addresses small and large audiences of real estate investors and business professionals nationwide several times each year. Chris is also an active writer, weekly publishing real estate, leadership, and endurance training articles.