Whether it is real estate or some other investment – there are questions you should ask yourself when deciding to invest in just about anything.
Three Questions To Ask When Investing in Real Estate
1.) Are you investing in real estate as a business or a side project?
This is something that should be decided before getting started. It does not mean the answer cannot change, but you should know going in what your goals are.
For example – If it’s going to be a side gig and you plan to keep your day job – that is fine, plan accordingly. Maybe that means you plan to acquire a few rental properties and use property management to handle them.
On the other hand, if you have dreams of building a rental portfolio to replace your current income – that is a something you should layout a business plan for so you have a path to reach that goal.
2.) What is your why for investing in real estate (or anything)
It’s important to understand why you want to do something because that in turn is the motivation to push toward progress and success. Without that you will easily give up or get burned out.
So ask yourself why you want to invest in real estate.
For me it was because I love passive income and the financial freedom that it can provide. The goal of building enough passive income to have freedom with my time, thus allowing to spend more time with friends and family.
Figure out your why before taking on any big endeavor.
3.) When do you want to retire and what does it look like?
Real estate or other investments do not have to be directly linked to your retirement plan, but it sure doesn’t hurt to do so.
Let’s say you want to retire from working a “day job” 10 years from now. What needs to be done to reach that goal? How much income needs to be generated?
For real estate maybe that means you need to own 25 doors generating $200 a monthly in positive free cash flow, which then becomes your “salary” in retirement.
Having a destination to give you a direction
The reality is – if you have no idea what your end goals are or the lifestyle you want then it is hard to make progress in real estate investing.
Enjoy the journey along the way, but we must have a goal to look out too in order to have direction for progress. Otherwise, you just wander from investment strategy to investment strategy.
If you enjoy my rental property investing tips, then you will love the book:
I walk you step-by-step through finding, buying and renting out a rental property. The book is your personal mentor!
Be sure to use the property calculator so you can run the numbers and buy right!