There is a fascination with real estate investing these days, but that old saying “land is always a good investment because they’re not making any more of it” is only partly true. While there is a finite supply of land, investing in real estate isn’t for everyone, and isn’t for some at this point in time.
Whether it’s pop culture driving the love of buying to flip, create rental income property or simply sit and hold, the trend of real estate investing doesn’t seem to be fading – even when economies fluctuate.
To be successful in real estate investing, you must do research and educate yourself. Know when the time is right to jump in. It’s a vast topic – one some experts teach seminars on, so it’s far too much to cover in blog posts – and knowing when the timing is right for you is essential.
My intent in these two posts is to give you a primer and get you thinking. For more information, I am also hosting a webinar on the topic of real estate investing on August 1, 2013. “Real Estate Investing – Is it Right for you?” Click here for more information.
While real estate investing isn’t just for the wealthy, there are certain circumstances or perspectives that may work against you if you dive in without understanding and education. The place to start is to recognize your current state of financial affairs and understanding of the market.
Real estate investing is not for you right now if:
- You have poor cash flow and are living (with challenges) from paycheque to paycheque
- You struggle to make minimum payments each month on credit cards and / or lines of credit
- Your credit cards and / lines of credit are maxed out
- You think real estate investing is a great idea because everyone around you is doing it
- You believe the TV shows that illustrate investment property buying and selling as easy – you think the ones that show struggle and investors who “don’t get rich quick” must be people who “don’t get it”
- You are unemployed or have a minimal income that barely pays your existing bills and expenses
- You expect to make thousands of dollars overnight with very little effort on your part and no risk
- You have no savings, back up plan or emergency funds
You also need to know where your credit rating and other financing markers are likely to sit. These go in tandem with the above points, but basically, the key areas for qualifying for real estate investing are: a good credit rating, sufficient income to cover current financial obligations and proof of a down payment, closing costs and other expenses available in liquid assets to do the deal.
Stay tuned! In the next post, we’ll talk about tackling doubts.
Written by Marci Deane, www.askmarci.ca