This post is all about difficulties of rental property investing.
Getting into rental property investing can be scary so it is important to do you research to know both the positive and the negative before jumping in. This post is not to scare you away, but to help you be more informed and aware of what's to come. The following list summarizes as well as giving you an idea on how to overcome some of the main obstacles, risks, and annoyances associated with being a rental property investor.
1. Building Wealth Takes Time
A lot of wealth can be created with rental properties, however like most wealth it does not happen over night. Creating wealth through real estate is all about consistency over a long period of time
2. It Can Be All-Consuming
Rental property investing my take over your life. However, if you set up your business correctly, you can outsource most problems instead of fixing them yourself.
3. You Have To Deal With Difficult People
Being a landlord involves dealing with people, some of whom are difficult to deal with. It is critical to conduct thorough research before hiring a contractor or property manager. Another critical step is to thoroughly screen your tenants in order to pick out those who will bring you the greatest trouble. You can reduce your involvement with difficult people and situations by outsourcing tasks you don't want to do.
4. It Involves Paperwork And Bookkeeping
A lot of people may not have known this before getting into rental property investing: There is a lot of paperwork to keep track of. It can be anywhere from leases, to taxes, to insurance, etc. It is crucial to keep the paperwork side of the business organized, because when it comes to rental property investing it is important to keep accurate bookkeeping and accounting records. You can use Quickbooks (not easy to learn), or you can use spreadsheets (if you use spread sheets there will be a lot of them)
5. You Can Lose Your Investment
Rental properties are an investment, and just like any other investing opportunities out there it involves risk, which means you may end up losing. Not every rental property investor is successful, however, with the right knowledge, networking, and system in place you can decrease your risk and increase your chance of success.
