Are you looking for a new entrepreneurial adventure? Maybe you’re a serial speculator who’s tackled many projects, or a new entrepreneur looking for an idea to launch your first business.
Either way, there are plenty of opportunities to make some serious cash in the real estate market. If you haven’t settled on a business opportunity, here are four reasons to opt for real estate.
1. When set up properly, real estate investing can be hands-off
When you think about being a real estate investor, you might dread the notion of being a landlord. It’s tiresome having to screen applicants, run background and credit checks, collect rent, and manage repairs.
It’s hard to imagine that anyone would actually want to be a landlord regardless of how much money might be made. The truth is that when you set up your investments properly, you can be a hands-off property owner and generate income at the same time.
For example, investors in Houston, Texas hireGreen Residential to manage their landlord duties, up to and including the filing of eviction paperwork if that should become necessary.
With a property management company working for you, you won’t get overloaded with further work when you’ve invested in real estate. You’ll still need to check in and make some decisions, but you won’t have to be a hands-on landlord with your tenants.
2. Real estate investments are a long-term wealth strategy
There are many operations you could begin, but many provide only short-term income. Technically, you may generate income for as long as you run your business, but in most cases it will never become passive income.
Real estate is different. Once you pay off your mortgage, any rent you collect will go toward property-related bills and the rest is pure profit. At that point, provided you’ve hired a property manager, your income will be truly passive (though not entirely effortless).
When your goal is to build long-term wealth, you need passive income. Real estate happens to be one of the best sources of that.
But it will take many years of hard work and attention to detail to transform your investment properties into a source of passive income. In the end, it’s only passive income when you’ve delegated your landlord duties.
3. A real estate partnership can help you get your first property
Partnerships are how many investors get their start in real estate. Many people say they never would have gone into real estate if they hadn’t thought to find a partner to fund their initial acquisitions.
When you’re new to real estate investing, partnerships can help you get underway. For example, when you don’t have the money to buy a property, you can form a partnership with someone to acquire your first property and share the profits.
The partner will hold the mortgage, and you could work as the property manager. To learn more about how partnerships work and how a funding partner can get you started in real estate, check out theBiggerPockets podcast and interview with Ashley Kehr.
Kehr was working as a CPA before she realized she could create a partnership with someone to fund her first property acquisition deal.
4. Real estate investing doesn’t require continuous innovation
Some entrepreneurial opportunities aren’t suitable for a long-term business unless you enjoy steadily reinventing the wheel. Many outfits rely on current fads and shifting markets to bring in repeat customers, and thatrequires constant innovation.
For example, if you sell running shoes, you’ll have to redesign your styles every year or two, or you won’t get returning customers. People who buy shoes want new styles, new colors, and new features.
It doesn’t matter whether those alterations are even useful; people want improvements and new features.
If you start a business that requires continuous innovation, and you’re not capable of that level of work, your business is likely to fail. Real estate, on the other hand, doesn’t require continuous innovation.
It’s hard work to manage properties, but you won’t have to remodel your structures every year to keep up with current interior and exterior design trends.
Real estate provides the best return for time and money invested
Running almost any business entails hard work. However, real estate investing offers the largest profits for the amount of work required to run the business.
Real estate is also perfect when you don’t want to have to change your products and services to match ever-changing trends. If you’re willing to invest your time, money, and commitment for the long haul, real estate can help you build long-term wealth better than almost any other business.
