In the world of real estate investing, we see a lot of would-be investors come and go. Some were unprepared for the inherent risks and challenges while others threw in the towel the second the market didn’t produce obvious, no-brainer wins.
Investing with the wrong idea — be it getting rich quick or finding nothing but success from the get-go — can lead to investors who give up.
How do you ensure that your investing career isn’t cut short? How can you be in it for the long haul when you don’t know what to expect or how to handle every bump in the road? Here are our top tips on how to be a real estate investor with staying power.
5 Essentials for Investors Who Stick to It
Realistic Expectations
Before you step into any investment, it’s crucial that you are aware of the reality of said investment. This goes beyond recognizing that you are not buying into a system in which you get rich quick. Anything that promises quick, amazing returns is probably too good to be true. Still, even if you recognize your venture for what it is — a long term investment — you can also fall prey to misconceptions and unreasonable expectations.
When you begin with one property or two, you have to build that portfolio if you want to reap the real benefits of your passive wealth. Too many investors go into the career thinking that those first one or two properties are all it takes to build lasting passive wealth. Not so — at Memphis Invest, we know it takes more. That’s why our advisers help you know when and what steps to take to grow a successful portfolio.
A Plan for Your Portfolio
While in turnkey real estate many of the details aren’t for you to worry about, investors who last are the ones who have a vision. They don’t just know that they want to invest, they know what they’re investing for. Planning your portfolio encompasses several factors. First of all, investors need to understand what it is they want to accomplish through their investments. This will drive your goals for growth and scaling, particularly if you are investing for a designated event, such as a child’s college education or for your own retirement.
Planning a portfolio isn’t just about your goals, though. It’s also about selecting diverse markets to invest in to reduce risk. It’s not enough to pick any market, though. Your ideal investment markets may come down to your willingness to take risks, your financial capacity, among other factors.
This is where a portfolio adviser comes in handy. You can express your goals and desires for your portfolio and receive direction on the when and where of building your investment portfolio.
Be sure to check out: These 4 Steps Lead to Successful Portfolio Growth
Risk Mitigation
Risk. The first thing to understand about it is that it is inherent in any investment. You won’t find a risk-free investment that is worth anything. That said, you’re not stuck with your risk. While a turnkey investor has much of their risk mitigated by their management team, you have your own responsibilities to ensure your investment career is smooth.
We’ve already mentioned portfolio diversification — investing in more than one investment market allows your portfolio to remain stable even in the case of a local economic downturn. Savvy investors also need to expect the best but prepare for the worst. Having a safety net built up before you invest allows you to tackle any problems without fear of being under financial pressure.
A Sustainable Strategy
Nothing is more important for the long-term success of a real estate investor than their strategy. We can fall into two primary camps: passive or active. Between the two, passive investing is more sustainable in the long-term. Active investing (like flipping) can reap rewards, but it often comes with considerable trial-and-error. You also have to depend on your own ability to hunt down deals and make the most of your investment. You can only operate so many active projects at once without an expansive team (and expansive resources).
Of course, passive investing comes with its own pitfalls, too. While you can invest passively for as long as you would like regardless of the market or your personal availability, certain types of passive investing don’t lend themselves well to your personal long-term success. Investing in REITs or crowdfunding projects, for example.
The problem here is that you are acting more like a stock investor than a real estate investor. You don’t choose the projects or direct anything that impacts the performance of your investment.
A turnkey investor combines the best of these strategies: the agency and targeted direction of active investing with the eased burden and long-term vision of passive investing. While turnkey investing is passive, it grants the investor more personal ownership and stock in their investments.
A Team with Experience
How does an investor do it all year after year, day in and day out? How do you overcome your own inexperience and break through as a successful investor? Turnkey real estate investment is the obvious answer. Not only do you transcend the need to do daily management tasks and property maintenance, but you have a personal adviser who will help you navigate your needs, desires, and overall portfolio health.
Where can you find a team like that? Memphis Invest.
Schedule your call now and build your best financial future.
