The rewards and struggles of being a real estate investor
Real estate investment:
The need for the modern infrastructure will never end. The significant increase in the population and the need for a modern infrastructure is creating more opportunities for the real estate investors. This sector is not even considered saturated.
Life of a real estate investor:
Like all the businesses and investment opportunities, real estate investment has its own struggles and rewards. We will be shedding light on the rewards and struggles of real estate business in this article. Firstly, have a look at the rewards of being a real estate investor:
1: Huge chunk of profit:
In other businesses, one has to work and wait for a long time before the business becomes profitable. But the case is different in real estate. The cash flow becomes positive after a short time. Once you have bought a property at a good place, you can easily sell it with the added profit at the price. And the return on investment is generally the best in this business.
2: Fewer taxes:
If you are renting your property, then you don’t need to pay a large tax on your earning through rentals. There are tax benefits for the rental properties. And usually, the big taxes are not levied on the earnings made through the rental properties. This makes it a lucrative business.
3: Increase in the value:
The value of the real estate property mostly goes up with the time. Even if the property remains same and no renovation is done, the value increases due to the location. So basically, the value of your investments will grow with time.
Struggles of a real estate investor:
All the rewards come with some struggles. The struggles and wrong decisions earn you experience which then converts to rewards. Now we will list some of the struggles and difficulties of this business:
1: Lack of research:
The research is must for the real estate investor. A thorough research is done to figure out the problems which could be faced in a particular area. The main thing is the effect of these problems on the price of the properties. It takes a lot of time and experience to do the research and a small mistake in this research could cause a big loss.
2: Having a bad appraiser:
Another common problem faced in this business is of buying the property at a wrong price. One should take the services of a good and honest real estate appraiser. Overpaying for the property is a big mistake and it results in a loss.
3: A bad team:
The investor can never work alone. He has to make a good team to manage the investment portfolio. A single bad member of the team can create hurdles in your business. So making a good team is a challenge. And the investor should never try to work alone as it could cause exhaustion and you may not be able to give time to your family and friends. So always make a good team.