It’s a question worth considering – especially if you’ve been on the fence. To invest or not? The answer Hipster has to offer is simple: maybe. It really depends…It depends on what kind of investor and person you are – what you want to achieve – and how comfortable you are fixing toilets (or not, to be blunt). PS – you DO NOT need to fix toilets to be successful as an investor!
Before you decide you’re just not a real estate investor, consider the pros. First, and foremost, real estate investing means cash-flow, appreciation and creating a wealthy future for yourself and those you love. That’s the amazing part of being a real estate investor. Where it can get a bit dicey – and where you may struggle before you dive right in – is when you encounter problems. And, as we all know, problems happen. It’s a part of life. Toilets need to be fixed. Scuffs on garage: they happen. Sometimes you’re faced with a vacant apartment. Sure, there’s some stress involved. That being said, the pay-off? It’s amazing. You can take your cash-flow and do whatever you want with it: expand your portfolio even more, travel the world, upgrade your digs, and build a trust for future generations while boosting your retirement savings.
What follows are five key questions to ask yourself in making the important decision: to invest in real estate or not?
1. Cash Flow: Do You Want It?
There’s a common saying in real estate: cash flow is king. We have to admit: getting a monthly check from an investment property feels good. Unless your street is lined with gold and your backyard is full of money trees – cash flow matters. It can – and will – change your life. The freedom of that monthly deposit in your bank account can mean whatever you want it to mean. Whether you use the free cash as a vehicle for amazing adventures or as a way to stockpile cash for those what-if’s in life, if you want cash flow – real estate investing can be a surefire way to start lining your wallet in no time.
2. Are You Patient?
Capital gains – the kind that come from holding on to a property and waiting it out until it’s worth selling – don’t happen overnight. In our opinion, the best kind of investing is to buy, hold, rent – and when the time is right and the market is up – then sell for true capital gains. If you are looking for big money fast, real estate investing may not be for you (but really, if anyone knows of a true way to get super rich over night – by all means, share it with us!).
3. Do You Want to Cash In On Tax Incentives?
Depending upon how you structure your purchase, and Hipster is always here to help, you can cash in on tax incentives that can help you save money and buy more property. Business expenses, occasional depreciation – all of it is considered valid by the IRS and is worth considering when thinking about buying an investment property or not!
4. Do You Need An Extra Push To Save Money?
A lot of us do. We get money; we spend it. Whether you have a small savings account or just inherited a big chunk, it’s tempting to go out and buy a pair of Manolo Blahnik shoes or a big screen television or whatever your heart desires. The sad news: those impulses depreciate and they are certainly not tax-friendly. If you find yourself spending money you’d rather be making money from, real estate investing might be the right choice for you. It’s a way to force yourself into saving money, creating true cash flow and having an investment you can sell when the time is right. Catch our drift?
5. Are You Comfortable Letting Go?
As you may or may not know, Hipster advocates using a property manager instead of dealing with tenants’ yourself…. Why? It frees you up to focus on the bigger picture – it stops the stress – and when you find an ace property manager, you know you, and your property, is in good hands. Property managers, when they’re good, take care of your investment so that you can do other things with your valuable time.
At Hipster, we love real estate investing (it’s no secret). If you’re on the fence, consider the above questions and really consider your responses. When you invest in real estate, you invest in: yourself, your future and your family. It’s a total win-win – if you’ve got the right personality to go with it, of course.