Let me ask a simple yet complex question: What’s the big draw to investing in real estate? Understanding the answer or answers to that question is sure to help you stay focused in your real estate investing endeavors.
Below are some reasons that either I have or have heard from my colleagues.
So, Why Real Estate?
Diversification:
Most investors have real estate as just one portion of their overall investment portfolio. Having diversity adds a certain amount of protection from a crash in one segment of the market and not others. It also provides with better long term earning potential in a lot of cases. These investors (myself included) have divided their portfolio to include mutual funds, stocks, metals, and real estateas there investment package of choice.
Freedom:
To be honest, this is why I became interested in investing in real estate and I suspect most people reading this blog would agree that freedom is their main reason for investing in real estate. I was more than excited at the idea of becoming financially free. The idea of quitting my Monday through Friday job working for somebody else was very enticing. The idea of becoming rich beyond my grandest expectations was a big draw as well. Having the opportunity to set your own schedule and take time off ….Who wouldn’t want that?
Control:
This is a big one for many investors, myself included. When investing in real estate you do have more control over your finances and investment. When you consider many of the other investment vehicles such as the stock market, the level of control we have is nil or next to nothing. There are so many things that can effect the stock market many of them nonsensical and hard to predict. Whereas real estate follows a pretty predictable pattern if you look back in history.
A Career:
Some investors view real estate investing as a career and have a more entrepreneurial look on owning real estate as a business. Using real estate investing as a way to eventually replace a current job or line of work that may not be as well suited to an individuals goals is somewhat common. Making real estate investing a full time job usually requires time and really good connections to the movers and shakers of the real estate world.
Excitement:
Investing in real estate is competitive, you have to stay on top of your game if you want to snag up a great deal before someone else does. Chasing down a deal can be very exciting especially if you know that you just got a great deal on a property. Even looking at properties and determining what level of remodel would really set the house apart and make it rent quickly can be exciting. Taking a property that is kind of blah and turning it into something wow can be a thrill. Not to mention the satisfaction that comes from providing nice housing for families.
Options:
After ten or so years of real estate investing I have come to realize that I’m not going to make a career out of investing in real estate but I love the extra income and options that it gives to me. Having the safety net of equity and rental income allows me to be flexible with my time. It has given me options to do what I want most in my life such as opening doors to traveling or other things that I want to spend time doing.
What does real estate investing do for you? What is your driving factor to invest in Real Estate?