Real Estate Real Talk: What the Pros Know

Ever wonder what it’s really like to be a real estate investor? If you’re thinking about investing in real estate, or even if you’ve already started, you may be wondering what the true day-to-day is for the average investor. I can tell you that it’s probably not like what you imagined, with big payouts that happen fast and deals that require only a few hours of your time each week. Here are 5 realities of real estate investing that you can expect:

1. Every market is unique - right down to the neighborhood. What’s happening in Los Angeles is not the same as what’s going on in Kansas City. And even within the KC metro, real estate trends are vastly different in Midtown versus south Overland Park. My point is, you must recognize that taking a single approach to every deal is not going to work. You have to learn the intricacies of your local market, and then make your decisions and acquisitions based on that.
2. Gratification is often delayed….and may be less than expected. On TV, a lot of those real estate programs show investors enjoying massive payouts in a relatively short period of time. In reality, the reward can take much, much longer. Depending on what type of investment strategy you’re using, it’s not unusual to wait months or even a year to start making money. It takes time and commitment to become successful, and going into it expecting to get rich quick is a mistake.
3. If you treat real estate as a hobby, you probably won’t go far. Always, always, ALWAYS treat real estate as a business. Approaching it as a hobby that you do for fun on the side is setting you up for a lack of commitment and, quite possibly, failure. To maximize your profits, it’s vital that you approach each investment from a business perspective using objective analysis to come to well-thought out decisions.
4. The best education is free. Arming yourself with as much knowledge as possible is critical to your success as an investor. The best part? Much of what you need to learn can be found for free online, in blogs like this one. There are hundreds, if not thousands, of websites devoted to real estate investing educating. True, some are better than others, but reading all you can for free online will give you a broader knowledge base than what you’ll learn in one of those silly, paid seminars by some self-proclaimed real estate guru.
5. It ain’t easy. In fact, investing in real estate is a ton of work, and it’s harder than you think. There is so much “behind the scenes” work that must be done with each property, and a lot of it is unglamorous and boring. There’s a lot of time spent in front of computer screens, on the phone, driving around, etc. But remember, if you put the hours of hard work in now, you’re much more likely to reap the rewards later on.

How’s that for real talk? So many people hear about the fun side of real estate (i.e., cashing those big checks), that they completely overlook the reality of it. And the reality is that it’s not all big checks and glamorous property makeovers. It’s hard work that demands energy, time, commitment, money and more. Before you jump into investing, make sure you understand that reality and are ready to take it on.