Questions to Ask before You Invest in Real Estate
By Bigg Success Staff
04-07-08
Bigg Success in Real Estate
We’ve all seen the infomercials that tout real estate as a get-rich quick panacea. Just buy their product, follow their advice, and soon you’ll be quitting your job and living on easy street.
The problem is … it’s a dream, not a reality.
We’ll hasten to add that their program is probably a good one. A small percentage of people will buy it and succeed, although probably not as quickly as the infomercial would lead you to believe.
Investing in income-producing real estate is a great way for the right person to increase their net worth. In fact, it’s one of the most certain ways to get rich … slowly!
But the question is … are you the “right person”? In other words, is real estate investing for you? Because make no mistake about it, real estate investing is a business.
Real estate is a business
Even if you only own one investment property, you’re in business! So you should have some general knowledge about running a business and some specific understanding of a real estate investment business before you invest.
You need to understand the marketing, operational, and financial sides of real estate investing. You need to know how to
- promote your property to prospective tenants
- keep your property in good condition
- track your income and expenses
Questions to ask yourself
It all comes down to your personal characteristics and your plan. Do you have what it takes to be a bigg success in real estate investing?
So before you start looking at property to invest in, ask yourself some difficult questions.
- How will you find good properties for sale?
- How will you determine how much to pay for a property?
- How will you know if the property is in good condition?
- Do you have the time and patience to keep looking at properties until you find the right deal?
- Where will you get the money required for the down payment?
- After you make the down payment, will you have money left over for unexpected costs?
- Will you have enough money to keep paying the bills on the property even if you have a vacancy?
- How will you find prospective tenants?
- How will you screen these people to make sure they will pay their rent on time and take care of your property?
- Do you have the time and patience to show your property to prospective tenants?
- What will you do when a tenant is late on his or her rent?
- Do you have the temperament to remain unemotional about your tenant’s situation and your investment?
- Are you prepared for phone calls late at night or early in the morning because your tenant needs something repaired?
- How will repairs be handled?
- Do you know the law in your area regarding your rights and tenants’ rights?
If you don’t like your answer to the above questions, don’t despair. You can find a partner to fill in the gaps or consider hiring a property management firm. You won’t make as much money, but you can still build your wealth. Or you may just decide that being a landlord isn’t for you.
Contrary to what many infomercials would lead you to believe, real estate investing isn’t easy. However, if you have the right temperament and approach it as the business it is, it’s a great way to supplement your retirement. It might even make you rich … slowly!
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