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Six Questions to Ask Yourself Before Investing in Cypress Real Estate

Collection of Colorful Origami HousesReal estate investing is a challenging business. Contrary to what you may have heard from advertising claims and get-rich-quick schemes, investing in real estate is neither easy nor quick. However, it has been proven again and again that it is a path to wealth and can give you an inflation-proof way to grow retirement and other accounts. Becoming a successful real estate investor requires a certain amount of experience, knowledge, planning, and skill. For this reason, you need to ask yourself these six important questions before embarking on the journey of real estate investment.

1.      How much do you know about the real estate industry, market, terminology, and so on?

You must know how to spot a good deal on a property. It’s a crucial skill to master. However, successful real estate investing requires knowing more than that. If you have plans to invest, then you’ll need an excellent grasp of what drives markets, changes to laws and regulations, current trends, and warning signs to watch out for, etc. If what you know about rental property isn’t quite complete,  it’s a good idea to first learn all you can about it. After you’ve gained the required knowledge, then you can start being a real estate investor by making your first purchase. The internet offers so much wealth of information and resources for new investors. There are sites like BiggerPockets.com that can get you started. Also available are dozens of how-to books, articles, and videos.

2.      What kind of financial skills do you have?

Investing in real estate is different from investing in stocks or other securities. There is a financial skillset and lingo being used in the industry that sets it apart from other industries, and successful investors need this so they can get the best deals. To illustrate, let’s say someone wants to begin investing in rental properties. They need to know how to analyze a potential property for cash flow, estimate repair and maintenance costs, calculate anticipated rental rates based on current market conditions, the amount of your expected return (both long- and short-term), and more. Now, if you haven’t mastered the terms and ideas in real estate financing yet, do think about expanding your education. It will really be a great help.

3.      Do you have a clear vision for your real estate investing business?

If you own a rental property, you are in the investing business. And just like any other business, yours will benefit from having a specific set of goals and a detailed plan of how you intend to achieve them. If you haven’t done so yet, create a business plan that will help you articulate the big picture and navigate through any obstacle. Also, an exit plan is essential, and you should be prepared with one long before you need it. The truth is, real estate investing isn’t just about finding great deals and buying in; it’s also about knowing the proper way and timing to get out.

4.      How comfortable are you with risk?

All investments carry some degree of risk. It’s no different with real estate. While the risks in real estate investing are different from other types of investments, Murphy’s law still holds true— things can and will go wrong sometimes. Thankfully, there are opportunities to mitigate the inherent risks by deciding in advance what kind of real estate investor you want to be. A good strategy many rental property owners have is to develop a niche, purchasing similar properties. It’s a pretty good strategy considering that their experience gives them a deep understanding of one particular kind of investment property. If a high risk and reward are more your thing, you may want to gamble a bit more on higher-priced properties, or those in high-rent areas. For the investors more averse to risk, less expensive rentals in stable neighborhoods might be the better option. The profits may be a bit smaller but it would be a surer bet.

5.      How strong are your interpersonal skills? Can you work well with others?

At its core, real estate investing is a business that relies on relationships with other people. As a real estate investor, you’ll be rubbing elbows with a large team of real estate, mortgage, and home remodeling professionals. If follows that one of the keys to investing success is the ability to form a team of people who you can communicate with and with whom you can develop a relationship of honesty and respect. If you notice real estate investors who are successful, you can observe them leveraging their trust in other people to help them complete the many tasks that real estate investing requires. By doing this they accomplish so much with so little time spent. They also engage in networking opportunities and trade referrals as a way to solidify and build mutually beneficial business relationships with others.

6.      Who is going to manage the property?

The way it’s been normally done before is that real estate investors were owner-landlords. The vast majority of them were people who invested in and then managed their own rental properties. That was in the past, but now the trend has changed. The reason is that this approach tends to limit your investing potential. This limits you to a small geographical area. Using today’s real estate platforms and with the rise of national property management companies such as the Real Property Management Republic, investors can buy rental properties just about anywhere. You can now go anywhere in the country looking for the best deals as there are nearly 300 quality property management offices nationwide. All these offices are ready to care for and lease your rental properties no matter where you find them.

In Conclusion

To be a successful real estate investor, you need to have the best available information, experts, and tools. Which is why the Real Property Management Republic offers a free rental property assessment to investors looking for their first investment property. To get this free service, feel free to contact us online or call us at 281-362-5001.

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