My Take: What It Takes to Become a Real Estate Investor
There was an incident at the company’s first staff meeting this year. My managing director asked a question: Who invested in real estate? To my surprise, I’m the only one who raised my hand. I am not sure if my dear colleagues are too shy to admit that they invested or any other reason that prevented them from “revealing” this “secret” to others. Until after meeting and talking to a few people I realized that it might be true that none of my colleagues invested in property. I can briefly summarize it in the following reasons:
good debt and bad debt
Some people believed that all debt is bad. Therefore, they will do everything possible to reduce debts. For example, pay off the home loan as soon as possible, as this will save interest.
Some people like to use other people’s money. They will maximize ROI by taking loans. For them, debt might be good if the income (generated through the use of the loan) can pay the interest and yet generate surplus.
Unless you have enough cash, you should apply for a loan to buy a property. It will be difficult for those who do not have a lot of cash and are not willing to take a loan to acquire a property.
Play to win or play not to lose
There are differences between people who play to win and those who play not to lose. Some people manage their money in such a way that they don’t go broke. Therefore, they will only go for low or perhaps medium risk investments. “I will only take a loan to buy a property when I can pay the monthly payment, even if there is no tenant occupying the property.” Unless they have very strong cash flow (like a high salary, business income); they will not correctly take out loans to buy rental properties.
Some people manage their investment to get rich. “I’ll take out a loan to buy the property if I’m sure the rent can cover the installation payment on the loan.” They may opt for a riskier investment if they know there are opportunities for them to earn.
Knowledge and experience
It takes time and effort to become a successful real estate investor. Real estate investing is like any other profession. For example, to become a successful software developer, you must have a passion for programming; Learn programming skill and practice more. To be successful in real estate, you need to understand the real estate investment process, such as property search, appraisal, buying process, the legal part of the transaction, property management, etc. There is no magic in real estate investing. It sounds like a grueling process to be a real estate investor.
“The Poor TRY hard to be rich while the Rich COMMIT to being Rich”
Commitment is needed for success in any sector; There is no exception in real estate investing.
It’s your choice
Many people want to own many properties, but not everyone can fulfill their own dream. Some of the common reasons given are:
“My salary is low and it is difficult to get a loan from the bank.”
“I don’t have money for a down payment.”
“I don’t have time to research and search for properties.”
So “I HAVE NO CHOICE” but I can’t own much property. Once again, “NO OPTION” is a choice. If you allow the above “excuses” to limit your ability, then “NO CHOICE” and you have no chance of owning much property.
Action, Action and Actions
There are many good properties selling for lower market prices. There are plenty of blighted real estate investors waiting to raise your price. There are many hungry bankers willing to lend you money at an interest rate much lower than the published rate. There are many good tenants who choose to rent over buy. All you need is to take action and search for them. Success is when opportunity meets preparation.