There are many questions that should be asked before embarking upon a career of real estate investment. The first and foremost question however should be whether or not you are truly committed to making real estate work for you. This is not a business for the faint of heart. In order to truly turn a profit you must be at times ruthless but ethical when it comes to getting a property in sellable condition.
Why So Serious?
The reason a serious commitment is needed in order to make real estate work for you is simple. There will be ups and downs along the way. The stock market experiences rises and falls regularly. Just as you cannot dump all of your stock over one bad day, the same holds true even more so in the realm of real estate investing. Property values in general rise gradually over time. Even if the values in a community falter, chances are that they will eventually recover.
Those who bank on the slow and steady growth in the value are referred to as buy and hold investors. These investors are truly committed to their investment. Some of them elect to hold the property as a vacation property. Others opt to earn an income on the property by renting it out to other families or vacationers.
This is a great way for many people to enjoy the luxury of a vacation property without absorbing all of the expenses involved in owning. The rentals will help compensate some of the costs when the owners (investors) are not in residence. This is a fairly common practice in high demand tourist areas.
Those who own rental properties must also be committed to making their investments work for them. Rental properties are not a ‘hands off’ type of investment. They will need to be maintained in order to remain in demand by tenants. You must also make constant efforts to keep these properties managed and filled. Perhaps even more important is to ensure that you are collecting your rent each month and that the properties aren’t falling into a state of disrepair or abuse by tenants.
Many investors retain the services of property management agencies in order to handle the month-to-month details and collections. This is a great idea regardless of if you have one lone rental property or a vast portfolio of rental properties. You should keep your rental properties in reasonable repair throughout the years. By doing this, they can become liquid assets in time. In other words, they may actually pay for themselves a few times over if you invest for the long-term rather than focusing on the moment.
It doesn’t matter what type of real estate investment you intend to have. What is important is that you are prepared to make the commitment that is necessary in order for your venture to be deemed a success.