Everyone wants an investment that pays significant dividends with low risk and a turn-key experience. While that may be an unrealistic expectation, that doesn’t mean you can’t enjoy success and ease-of-use with certain investment choices.
All investments come with some level of risk – that’s the name of the game, but the level of perceived hassle of your investment choice changes with the individual. It’s true that real estate comes with more responsibility and involvement than some other investments, but it’s still among the best choices for longevity and building wealth. Some of the responsibilities experienced by real estate investors include:
Renters and Tenants
People can be unpredictable and you never know what someone’s home upkeep and cleanliness habits may be. It’s very possible to get a tenant who doesn’t devote the same care and attention to your property as you might. As the owner of the property, it is your responsibility to keep the house in good and working condition.
On the plus side, earning money from rental fees can provide a serious income boost and allow you to meet your financial and personal goals for the future, even if you have to devote more time than you’d like to interpersonal dealings with tenants. Hiring a good property manager can be well worth the cost if you don’t want to deal with many of the day-to-day headaches that come with being a landlord.
Repairs and Upkeep
Buildings require maintenance, plain and simple. Even if you have the most considerate tenants on the planet, appliances break, faucets leak, and seasonal issues may require you to fund repairs for flooring, fixtures, and other related issues. It’s impossible to avoid having to repair or upgrade your property – especially if the building is older or located in an area that experiences extreme weather.
Choosing the right materials and improvements for your property can actually help improve its value, allowing you to earn additional rental income for future tenants. Set aside some of the monthly rental income in a reserve account that you can use for future repairs, knowing that you will need to do some. That way you will be more prepared for any repairs that may come over time.
Certain areas of the country are hot commodities – they may have a proliferation of high-paying jobs, temperate weather, and diverse cultural experiences. It’s definitely more cost-prohibitive to get started in these areas, which makes finding an investment property there a hassle, but you may be able to later sell that property for a significant price increase and profit.
The fluctuation of the market is just as unavoidable as maintaining the physical state of your investment property. However, changing markets can be opportunities to buy low and sell high or secure a property in a coveted area that may almost certainly net a fantastic profit if you decide to sell at a later date.
There is certainly some hands-on involvement when it comes to real estate investing, but whether this is perceived as a roadblock or hassle to investment depends on the individual. Many investors find the challenge and benefits of real estate investment to be personally and financially rewarding. To learn more about whether real estate investing is right for you and what you can expect, contact the team at Invest Success to get started with our investing classes.