Real Estate Investing Is Not A Game
Some people approach investing as a game, as if the uncertainty about whether you will gain or lose money from the investment, and how much you will gain or lose, is part of the fun. If this is your approach to investing, then buying real estate properties and renovating them in order to generate rental income from them is not for you. Being a landlord or landlady; even though some people have full-time jobs in addition to owning rental properties, you will be sorely disappointed if you think of real estate properties as a source of passive income. You can earn a considerable amount of money by renting out real estate properties, but doing this takes work; it is an investment of time as well as money, like any business. As with any business venture, you cannot underestimate the importance of trial and error, but a Washington DC real estate lawyer can help you avoid costly mistakes as you get started investing in rental properties.
It Takes a While for Investment Properties to Become Profitable
One of the most exciting parts of real estate investing is buying an inexpensive real estate property and daydreaming about how attractive and valuable it will be after you renovate it. If that is your only reason for being interested in real estate investing, then you should flip houses instead of investing in rental properties. When you buy a fixer upper with the goal of renting it out, your estimate of how much you will have to spend before the property starts bringing in rental income should account for time as well as money. Every month that the renovations are still in progress is a month that you are making a mortgage payment on an unoccupied property.
Being a Landlord Is Not All About Money
Marcia Castro Socas has been earning income from rental properties for decades, and one of the most important lessons she has learned is to focus on your own properties and your own tenants, rather than focusing too much on news and speculation. In her view, a profitable unit is an occupied unit, so the best investment you can make is to build a rapport with your tenants so that they will feel comfortable staying in your units for the long term. For example, during the housing market crash of 2008, conventional wisdom had it that owning real estate was a liability, but as many of her fellow investors were selling off their properties as fast as they could before the value of the properties decreased any further, Castro Socas decided to hold onto hers, since they were occupied. Years later, those units are still generating rental income, and they have rarely been unoccupied in all the intervening years.
Contact Tobin O’Connor Concino P.C. About Investing in Residential Real Estate
A Washington, D.C. real estate lawyer can help you navigate the costs and risks associated with investing in residential real estate. Contact Tobin O’Connor Concino P.C. for help.