Why invest in real estate? Now is the time to buy while houses are so reasonably priced but that aside it can be one of the most rewarding jobs anyone can have. There are many plus points but it is prudent to be aware of the possible pitfalls too. The canny investor will always do his research first when choosing a suitable investment and know how to make it productive in terms of yield.
It can be extremely fulfilling when you know that you are working for yourself and don’t have to answer to anyone else; it can also give you a sense of self worth but be warned – being a real estate investor can involve a few gambles, although taking a calculated risk is always the safer option.
There is no more worthy a cause to fulfil than to keep the roof over your head and remember this can be at stake if you get things wrong.
As well as gaining a sense of purpose in life and hopefully providing your family with long-term financial security (emphasis on the phrase ‘long- term’ because being a property investor is no easy way to a fast buck) you will be your own boss and avoid the daily grind of the usual nine to five routine.
Becoming an investor in property is not for the faint-hearted who do not cope well with unexpected problems, or those who may not take kindly to the many responsibilities that go along with owning a number of properties.
If you want a quiet life then forget it and get an ordinary job where you can go home at the end of the day and put work related worries behind you.
There will be times when you will dread the phone ringing, since as luck would have it, things usually go pear-shaped all at once. You have to be contactable at all times because if things aren’t addressed swiftly they will invariably get worse. Often you will wish you can just pass the problem to someone else but no, you have to deal with it; it’s your responsibility.
Investing in property can be lucrative in the long term but tread carefully if you are only bothered about short term financial gain. This is not investment but speculation if you are only bothered about making a quick sale and a fast buck.
Becoming an investor in real estate is therefore a huge commitment and not one to be taken lightly; you will be giving yourself a job for life and you will need to be available evenings and weekends too – not just within normal office hours. If you choose to manage your own properties (recommended if they are located within reasonable travelling distance) be prepared to deal with any situation that arises – from real emergencies to the purely trivial.
The paperwork will be horrendous; you will most likely have to convert a room in your house into an office and be prepared to keep a careful record of all expenditure.
Doing your homework before embarking on any major investment is absolutely necessary and always have at least half a dozen contingency plans when things go wrong as they invariably will.
Ridiculously illogical requests and comments from tenants will amuse you no end such as the inevitable phone call in the depths of winter to complain that the rental property soon becomes cold once the heating is switched off.
Having the time and having the money is always a good way to start where any business venture is concerned but if this is not the case then borrow, borrow, borrow to finance your purchases. Every successful business has to borrow money at some point and this is especially true of any property investment company due to the large amounts of capital needed to fund deposits.
If you have always had a keen interest in property and are the sort of person who continually looks in the local papers, comparing house prices you will already know something about property investment.
You will soon discover that being an investor is a challenge and a continual learning experience. Rarely can you know immediately how to deal with certain situations as they arise as every circumstance poses its own individual problems. Being a landlord means you can only really react to a situation once it has occurred and you will have to make the best decision at the time concerning everyone involved.
Investing in real estate is something anyone can do if they already own a house which has built up sufficient equity to be remortgaged so a deposit can be put down on another. A property portfolio can be run on the same basic housekeeping principles as a single household. Common sense and a sense of commitment are perhaps the best skills you will need to acquire.
You will need to take pride in your properties and when you see one that you have renovated which now boasts a new roof, a fresh coat of paint and double glazed windows, you will feel enormous satisfaction that it is no longer the dilapidated wreck you first bought and has now been transformed into a desirable place for someone to live.