Have you seen the late-night infomercials featuring the get-rich-quick real estate investing schemes and decided you`d like to turn in your resignation, sit back and start watching your money grow by leaps and bounds?
Think again. It`s not as easy as the infomercial leads you to believe. Yes, you can definitely improve your financial outlook by investing in real estate, but you have to do it the right way.
Real Estate Investing: Proceed with Caution
Below are just a few things you should consider before investing in real estate. Don`t even think about real estate investing until you have answered the following questions:
- Are you ready to make a change? We`re not talking about changing your clothes or your hairstyle. We`re talking about a lifestyle change. Unless you`ve spent time considering the pros and cons, and have decided the pros outweigh the cons, then don`t make a significant change, like quitting your day job, before your investments earn you at least enough to pay your monthly bills on a consistent basis.
- Will you look before you leap? The worst thing you can do is dive into the waters of real estate investing without checking the temperature or determining if you`ll be in over your head. It`s a complex business so it pays to learn as much about it as you can before investing your first dollar.
- Have you heard the "spirit" calling? No, you don`t need to schedule a séance or visit your local fortune teller to discover your "spirit." You just need to take note of your daily patterns. Do you spend all your free time reading about real estate investments? Do you neglect your friends and family to pursue your quest? Has your avocation become more than a hobby? If you can answer "yes" to these questions, then you`ll know you`ve heard your spirit call.
- Are you cut out to be your own boss? You need to think about this very carefully before moving forward to become a real estate investor because working for yourself is more about sweat and grit than glamour and glitz. Unless you have real business savvy and are willing to put in long hours to build your business, stick to working for someone else especially if you`re an expert in your field. Remember, there are many wonderful chefs who make lousy restaurateurs.
- How much money do you have saved? You`ll need lots of it! Let`s face it, no matter how much you work or how hard you try, building your wealth through real estate investing will take time. Try telling your mortgage company to "just wait a few months" until you can earn enough to pay your housing bill because you had an unexpected, rather large, medical expense.
- Are you committed to running your investment business part-time until it "hurts?" Too many people quit working for someone else way too soon when they decide to become self-employed. No matter how much you hate your boss and/or your commute, wait before you cut your employment ties. Wait until it "hurts." Wait until the business you own is bursting at the seams from growth and has you "burning the midnight oil" to get everything required done. Every successful entrepreneur knows that fortunes are made during the odd hours - the late nights and weekends when those who are just making a living are either sleeping or doing anything else that is not even remotely related to their job.
- Are you willing to work out of your home for a while? Here`s another test to see if you`ve got what it takes to move your business dream to your business reality. Keep your overhead and expenses to a bare minimum while you grow your business. Working from your home, instead of renting office space, is one great way to keep your expenses low as you start up. You should be willing to feel the "squeeze" of a home-based business - that tug of discomfort that comes from taking over a spare bedroom to house your desk, fax machine and printer and no longer being able to eat in your dining room because you`ve converted it to a storage room. It`s being willing to trip over boxes and the employees you`ve had to add to keep up with your business demand long enough to see your balance sheet turn black for several months in a row.
If you`re still interested in real estate investing after reading this report, you probably have what it takes to be successful. While you are building your business, be sure to expand your network and contacts as well. You`ll need as many as you can get to start and grow your business. And, while networking, look for a good mentor to give you the right encouragement just when you need it most. It will make all the difference to your long-term success.