Investing in real estate may be something you’ve been considering for awhile now. It’s something you think you’d really like to do, but you still haven’t quite committed to jumping into real estate investment. Maybe you are still in the learning phase and realize there are a lot of questions you need to be asking before moving forward.
Part of that still, perhaps, is that you aren’t asking yourself enough questions (or the right questions).
If investing in real estate is just a theoretical idea of saving retirement money or building reliable passive income, take that dream to the next level. Instead of daydreaming about all the benefits of real estate investment, it’s time to knuckle down and make your decision.
Your security later in life - the security of your investments - relies on your getting answers to serious questions now and surrounding yourself with a great TEAM before moving forward. What better way to vet a great team than to get the answer you need and make sure you are pointed in the right direction as a real estate investor.
Real Estate Investment Questions to Ask Yourself
What kind of investor do I want to be?
Number one, who do you want to be in the investment world? Passive or active? Now, no investor can be truly passive in their real estate investments and be successful. All investments will make demands on your time and attention at times. There are still, however, degrees of involvement. If you’re looking only to diversify your portfolio, a more passive approach may be for you. Active investors are the kind who take on landlord responsibilities.
Not only do you need to understand the kind of investor you want to be, but you must research and talk to other investors about the realities of investing in real estate. You need to be prepared for all of the responsibilities involved.
Is this going to be a full-time business or a hobby?
Often, green real estate investors start with the notion that their investments will be a hobby, some distraction that will give them retirement perks, only to find themselves buried under their investments when they turn out to be more work than they bargained for. Understand what demands on your time you can tolerate, and don’t bite off more investments than you can chew.
What are the risk-factors for my investments?
All investments have risks. The usual risk is that you’re paying for something that may or may not with big returns in the end. Real estate is different from stocks, however. It’s a physical property that is subject to different risks than intangible factors. Your properties can be flooded, destroyed by storms or affected by factors that you can’t control. Are you prepared to cover the cost of insurance?
Am I committed?
Real estate investment is not fleeting. Stocks and bonds can be sold quickly, but real estate is a more long-term investment. Once you buy a property, you are going to have it for a while. As a real estate investor, you must be committed to your role for the long haul if you hope to find success. Perseverance and dedication are key.
No matter what questions you ask yourself before investing in real estate, don’t neglect the valuable advice of seasoned investors and your financial advisors. While they shouldn’t make the decisions for you, their insight is valuable for leading you to the right choices. Speaking of valuable advice! I sat down and recorded a video on the top 5 Irrational Behaviors that investors exhibit when investing in real estate. It matches this article in so many ways because it helps investors understand why they take certain actions and the questions that can lead us to take the good actions!
Watch the video above and let us know what you think! You can also leave any comments on this article below...
