Factors in Being a Real Estate Investor

Some investors devote only a couple of hours a week to their rental properties, while others spend entire weekends and some nights working with their properties. If you retain a management company to run your buildings, you should need no more than an hour or two a week to stay on top of your investments. However, if you maintain your own buildings, rent out your own vacancies, and take an active role in all aspects of management, even a small residential property can consume hours a week. Usually, the time demands come in waves. It's not the type of work you can budget.

Investors who hold down full-time jobs can manage their own properties, but the task can be demanding. Most management issues can be dealt with after regular business hours; however, some properties require more active management than others. If you have good buildings and good tenants, the properties might run themselves for the most part. However, if you travel a lot in your work, hiring a management company probably will be essential.

You don't have to wear a black overcoat and top hat and sport a long handlebar mustache to be a landlord. It is not necessary to go from door to door on a weekly basis to collect rent, although some landlords do. You can hire a management firm to perform most of your investment duties, but you must be willing to take some part in your investments if you want to see maximum success. In fact, this is true of most investments. People who invest in stocks usually don't buy them, then let them sit, for example. Good investors monitor their investments and make adjustments when the market shifts. And real estate often requires more effort than straight financial investments.

You have many factors to consider when weighing your decision to become a real estate investor. Are you willing to put up with the hassles of rental property? Does the thought of developing land excite you? Would commercial real estate suit you better than residential real estate? Can you see yourself as a stockholder of a co-op housing development? Does the idea of pooling your money with that of other investors then using the joint money to buy an expensive piece of real estate appeal to you? The list of potential questions you could ask yourself is endless. But you must address certain questions specific to your personality first, and that includes how much risk you are willing to take.