Unlike other investments, investing in real estate requires a lot of careful calculations and continuous monitoring of your market. You may also have to handle the regular upkeep and maintenance of the property or coordinate with other service providers, which can be time-consuming, challenging and costly.
Let’s find out if you have what it takes to succeed in real estate.
Do You Have the Right Skills?
Like I said before, real estate can be risky (don't worry, we'll solve that for you) if you don’t know what you’re doing. It is crucial for you to acquire the right skills before you decide to dabble in any real estate.
One of the things you need to be aware of is “cash flow”. A positive cash flow simply means that your income is more than your expenses every month.
You also need to understand exactly what you are investing in. You need to be somewhat familiar with your local real estate market.
Do You Have the Money?
After doing your homework, you will have a range of the initial investment you can expect to make in getting started. It's possible to get started with just a few $1,000, but that’s not the norm, so don’t even count on it.
You need to think about how much risk you are willing to take, as well as how much work you want to put into it.
Maintenance costs and property management fees are also expenses you need to be aware of.
Do You Have the Time?
The first option in traditional real estate investing, usually involves buying a rental property and renting it out to a tenant. This is a popular way to grow your wealth, but it also comes with some cons that you should be aware of before you decide to take this route.
Traditional real estate investing also requires that you search dozens of listings and visit lots of properties before you decide on the right property suitable for a rental.
You will also spend a considerable amount of time searching for tenants, staging the home, and showing the property to tenants.
While these risks are not enough to turn someone off entirely from investing in real estate, you have to know what you’re getting into before you make the decision.
In the next article I’ll show you some different investment strategies and how you can get started in real estate, even if you have little money and bad credit.