How Do I Become a Real Estate Investor?
When It Comes To Property Investment, A Crystal Ball Would Be Useful!
The Canny Investor
For anyone with surplus funds, the question of investing in real estate often arises. As with any other investment, the value can always go down as well as up but with real estate, you're faced with a 'hands-on' experience from the word go. If you want to sit back and wait for your pennies to turn into pounds without lifting a finger then it's better you entrust your cash to the bank and go about your daily life as before because becoming a real estate investor is a life-changing experience.
Houses by their very nature need looking after, Even with the best tenants in the world neatly ensconced in your desirable, dream property, there'll be areas that need constant attention in order to maintain some semblance of order. Affairs, if left to their own devices, usually fall into a state of chaos and it'll be up to you to prevent this.
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 or soul-destroying jobs anyone can have. There are many plus points but it's prudent to be aware of the pitfalls too. Canny investors will always do their research first when choosing suitable investments and know how to make them productive in terms of yield.
It can be extremely fulfilling to be your own boss and not have to answer to anyone else. There's also 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. Try to learn from the mistakes of others rather than your own and join property related forums where you can take preventative measures and solve problems before they become costly and time-consuming.
Tenants Can Trash Your Properties If You're Not Careful
What Can You Expect To Gain?
Is it a purely financial venture or do you envisage yourself as being in charge of your own little kingdom? Doing something useful and productive in the community can often provide a motive but the figures need to stack up and you must never let sentimentality or idealism lead you into financial meltdown. There's no more worthy a cause to fulfill than to keep the roof over your head - and remember this can be at stake if you get it 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'll be flexible in your work hours and avoid the daily grind of the usual nine-to-five routine.
Make Sure Your Desirable Dream Home Doesn't Become a Dilapidated Dump!
Forget The Quiet Life
Becoming an investor in property is not for the faint-hearted who don't cope well with unexpected problems, or those who may not take kindly to the many responsibilities that go along with owning and maintaining 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'll be times when you'll 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 problems aren't addressed swiftly, they'll invariably get worse. Often you'll wish you can just pass the problem to someone else but no, you have to deal with it; it’s your responsibility because you signed up for it.
How To Become A Successful Real Estate Investor
Think In The Long-Term And Do Your Homework
Investing in property can be lucrative in the long-term but tread carefully. if you're only bothered about short-term financial gain, you're not an investor in the true sense of the word - you're a speculator instead. If you're only bothered about making a quick sale with no real input deserving of a reward, then fast turnaround on properties will be by far the better option. A true investor has to stay the course.
Becoming an investor in real estate is, therefore, a huge permanent commitment and not one to be taken lightly; you'll be giving yourself a job for life and you'll 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're 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'll most likely have to convert a room in your house into an office and be prepared to keep a careful record of all expenditure. In these days of ever increasing rules and regulations and mounting legislation, it's wise to be au fait with current affairs in the political climate that may have a serious impact on your property empire.
Doing your homework before embarking on any major investment is absolutely necessary so always have at least half a dozen contingency plans when things go wrong as they invariably will. It'll help enormously if you already know someone who's made even a slight amount of money from property as all information is beneficial. Read property related books and anything that assists you in making rational decisions regarding your investments. Mistakes will happen but the knack is turning the mistakes around before you suffer financially.
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. Be sensible and don't borrow more than you can realistically pay back within the stipulated timescale.
If you've always had a keen interest in property and are the sort of person who continually looks in the local papers, comparing house prices, you'll already know something about property investment. You'll soon discover that being an investor is a challenge and an ongoing 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's occurred so you'll 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 property. A property portfolio can be run on the same basic housekeeping principles as a single household. Common sense and absolute commitment are perhaps the best skills you'll need to acquire.
You'll need to take pride in your properties and when you see one that you've renovated which now boasts a new roof, a fresh coat of paint and double-glazed windows, you'll feel enormous satisfaction that it's no longer the dilapidated wreck you first bought and will be proud that it's been transformed into a desirable place for someone to live.
There's no more worthy cause to fulfil than to keep the roof over your head... and remember this can be at stake if you get it wrong!— Stella Kaye
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© 2016 Stella Kaye