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Should You Be a Rental Investor?
Growing wealth by investing in real estate is a great way for women to build passive income and cash flow! However, it is not for everyone.
As I have continued to expand my portfolio of properties, I have accumulated experience and have realized why this investing method may not be the best option for every person looking to achieve financial freedom.
In this article I will discuss 5 reasons why I believe real estate may not be a good option for you! But, if you feel that you can overcome these adversities, you may have a great future ahead as a rental investor.
These are 5 reasons why you should not invest in real estate:
1. You are risk adverse with investing
2. You are not willing to self educate
3. You don’t like hard work
4. You’re not willing to take a challenge
5. You are not okay with sacrifice
1. Real Estate Investing is Risky
The first reason why you are may not be a good candidate to grow wealth with rental investing is because you’re scared of risk.
Now we all know that, no matter the method of investing that you use, there’s always risk! You cannot guarantee that you’ll have a certain percentage returned any exact return in dividends, for example.
Simply put, with rental investing there is risk.
Why Rental Investing is Risky
With rental property investing there is a lot of background knowledge that you need to gain.
Compare this with index fund investing. If you choose to put automatic payments into Robinhood, for example, there is not a lot of research an in-depth understanding that you need prior to investing your money.
What are index funds? Check out this detailed article to learn how to easily invest in index funds!
Due to the amount of research you need to do, networking, and learning, this increases the riskiness of rental investing. If you dive right in, without taking time to learn, you may increase your chances of losing more money, getting a bad deal, or not being prepared for a situation that arises!
2. Self Education is Key to Rental Investing
The second reason why rental investing may not be the best option for you right is because you aren’t willing to put in the time to learn!
When I first started learning about rental investing, I felt bombarded with calculations, numbers and terminology. I remember being so confused, since everything regarding real estate is typically brand new information for average Americans.
Good news is that there are a ton of books, podcasts, and courses out there to guide you into understanding how to be a rental investor! I have personally read a dozen rental investing books by now and have listened to countless podcasts. Even years into this, my husband and I are constantly learning because there is still more out there to explore in this field!
To get you started, here are a few of my favorite books, podcasts, and resources:
3 POPULAR RENTAL INVESTING BOOKS:
Reading is the easiest way to learn about rental property investing!
- The Book on Rental Investing by Brandon Turner
- The House Hacking Strategy by Craig Curelop
- Buy, Rehab, Rent, Refinance, Repeat by David Greene
RENTAL INVESTING PODCASTS:
After reading a book or two, it is suggested that you regularly listen to podcasts on rental investing to learn about specific case studies and get unique advice from investors.
My current favorite podcasts on rental investing include:
- BiggerPockets Real Estate Podcast
- Afford Anything by Paula Pant
- The Max Maxwell Podcast
3. Expect Hard Work
Why Rental Investing is Hard Work
Now the third reason why you may not be a good rental investor is if you just don’t like hard work!
As mentioned above, there are plenty of other investing options out there where you can easily create automatic payments and return years later. Rental investing isn’t that way.
Real estate investing is a very active form of investing. You need to self educate, learn how to do physical work, understand how property analysis works, and establish yourself as a landlord. That’s a lot more effort than just investing in your 401k or RothIRA!
How to Get Out of the Work as a Rental Investor
Thankfully there are ways to get around the hard work as a rental investor!
- Rental Property Managers
Utilizing property managers takes a lot of stress off your shoulders. There will still be expectation of you to communicate with the managers and to make small decisions, but allows you to focus less on being a landlord and more on growing your wealth!
Be sure to check out this article about why you should consider getting a rental property manager!
- Hire Contractors
By hiring out the work for your properties, you can save yourself on doing the physical work to fix up your rentals. Remember that this may cost you more money, but is an easy option if you don’t have experience, or time, to work on your properties.
4. Rental Investing is Challenging
The fourth reason why you may not be a good rental investor is if you want something easy.
As mentioned above, there are other options for you, especially if you’re new to the concept of investing! If you’d like to learn about easier ways to invest, I’d recommend you first check out my favorite free apps that give you stocks and free money to learn about investing.
Diversification is Important
I also don’t recommend rental investing as the sole way that you invest.
Investing comes in so many different shapes and sizes. Thing is, rental investing is its whole other category! This method of investing is an entirely different option that took my husband and I two years of learning just to have the confidence to get our first unit.
It’s important to realize that if you want an investing option that you can get into right away, rental investing is probably not the best option at this time for you!
5. Rental Investing Takes Sacrifice
The fifth and last reason why rental investing may not be the best investing option for you right now is if you’re not willing to sacrifice!
As already discussed, there’s a risk to getting into rentals. You have to take time to learn about it and potentially money put into it (courses, books, mentors). Then there’s the whole effort of putting in physical hard work into your properties to get them rented.
Why Rental Investing Takes Sacrifice
There are two types of “sacrifice” that you may endure as a rental investor, especially at the beginning of your journey!
First, there is time sacrifice.
This could look like sacrificing evenings for learning or sacrificing your lunch breaks for researching properties. Or, potentially giving up some weekends for rental investing meetups and to review potential deals with a real estate agent.
Then, there is money sacrifice.
This could look like spending your extra budgeted cash on an Audible account to listen to real estate investing books, courses, seminars, meet ups, or simply going to coffee meetings with potential agents, lenders, contractors, or other investors.
Why You Should Become a Real Estate Investor
I have created a free rental investing course on YouTube and offer countless freebies, printables, articles, and videos to women who want to grow passive income and wealth using rental investing!
I believe that this method of investing is an incredible way to achieve early financial freedom, and I am a living example! I literally have hundreds of articles on this website and tons of videos where I share my story and explain why this is my passion.
If you are willing to accept this new method of investing and to expand yourself into the world of rentals, we are here with open arms! I created this article to give you a glimpse into what it looks like to be a rental investor and some of the challenges that come with it.
Be sure to go check out the free course I offer to help women with rental investing and join my email subscriber list to get exclusive content about growing your rental portfolio!