When you think about becoming a real estate investor, the first thing that comes into your mind is the money that you need for buying the real estate property. It’s true that this is important, but there are also other important things that you have to be careful about.
Having a real estate property as an investment means more than simply owning the place. If you think about this, then you are already a home owner and you know how many bills you have to pay each month and what maintenance is.
However, owning a bigger real estate property, like a building with apartments or an apartment complex, means that you will have more responsibilities. It’s much more than managing a single home, as this requires more attention and plenty of details to take into consideration.
The budget – that’s the easiest part. You’ll find out in no time how much money you can use from a financial institution or a bank and how much money you already have at your disposal. Sum up these two and you’ll get your budget for buying the place.
But, as the title say, it’s not always about the money when you think of real estate investing.
The property valuation – yes, this is important. This is a step that you’ll have to take BEFORE signing the papers and deciding for the property. The property valuation will give you all the details that you want to know about that property, starting from the size, the number of apartments, and the value of everything you want to buy. This is better combined with a property inspection, as this will also tell you what is the building made from, what repairs need to be done and so on. Most sellers find themselves asking how do I go about selling my home fast without hassle, and it’s during your property valuation you can show them.
Don’t forget that even if the price is competitive, you might need to make different repairs and this can make a hole in your budget. This can also take time and an extensive project will mean that you won’t be able to lease the apartments very soon.
The time – think about this. Think about if you have enough time to spend on taking care of this new business, because this is exactly what real estate investing is. This is a business almost like any other, but this will take up even more of your time. There are different rules and regulations about managing a property, and it can be harder for an entire building or an apartment complex. If you do this alone, you’ll have to be there 24/7, as each tenant will have a different problem or a different request and you will have to take care of everything.
The team – is represented by the people you work with. Being alone in this business means financial suicide, and you’ll risk losing all if you try to take care of everything by yourself. You’ll need someone to take care of the property management, a plumber and an electrician to be at your disposal, and even a construction contractor if you want to make significant changes in the building.
It’s easy to come up with the money needed for this kind of real estate investment, but it’s harder to take care of the entire property by yourself. So, when you think about this kind of investment, also think if you have the passion and the time needed to make it worthwhile and work. Two of the most successful investors I know have done this very well in California; buying property, using them for rentals or resale purposes and have made a very nice living. You can learn more about how they operate and how they run their business here.