While real estate is proven to be a great long-term investment opportunity, there are some things to understand and consider before taking the plunge. Business owners and entrepreneurs are some of the most active real estate investors, so I wanted to get some opinions on investing in real estate that might help readers have a better understanding of what it really entails.
There are a lot of little things to consider, and the tips and insight below should help give you a better understanding of all the moving parts involved. Making the right decision at the right time is part of the success formula.
Make your primary residence your first purchase.
“Real estate is part of a solid investment strategy because it is part of a well-diversified portfolio. That being said, a primary residence can be a great investment for those that find it difficult to find the willpower necessary to put money into savings.” -- Matthew Kolb of All High Schools
Must be knowledgeable.
“Yes providing you are knowledgeable in the industry, and your investment is solid. Having the money to invest is not the same as being able to afford it. You need to be certain you are gaining a potential asset and not a liability. Investments should be grounded in passion.” -- Shawn Freeman, Founder and CEO of TWT Group
Diversify your portfolio.
“I believe real estate investing is a solid investment. I love real estate investing, because you are investing in a tangible asset and not a piece of paper or idea. It's also important to have a diversified portfolio and real estate can provide that for many people.” -- Ben Walker, Founder of Transcription Outsourcing, LLC
Consider purchasing your commercial office space.
“I think commercial real estate is a great investment if you can find property big enough for you to run your business out of and also rent to another tenant or two, allowing you to cover the building expenses. It's a great move to start your own investment holding company.” -- April Gillmore, CEO of ClickFirst Marketing
Know your money will be tied up.
“If you can afford it, then yes. But don't forget to always keep some cash reserves in the bank as well. If you tie up all your money in real estate you might find yourself in a difficult situation if you ever need access to cash. It can be very hard to liquidate real estate on short notice.” -- Andrew Tran, Founder of Therapy
Look for property with rental potential.
“Depending on market conditions and area, real estate can be a solid investment strategy, especially if you plan on renting out your property. Renting your investment property can bring you an additional stream of income as well as a valuable asset added to your portfolio that you can later sell.“ -- Sean Christman, Founder of Slamdot
Be prepared for a long hold.
“It's a great investment if you buy in the right markets and have a long-term plan. It's not something you do for short-term gains. If you have some money to invest and can let it sit for a bit then yes, real estate is a better investment than most savings options.” -- Jim Epton of Dom Huga Ltd
Educate yourself first.
“Depending on your personal level of knowledge and expertise. If you have no idea what you are doing, stay away. On the other hand, for those who spend the time to research and make good buys, I would say it is a win.” -- Marc Webb, Founder of Real PDL Help
Do proper research.
“It is definitely a solid long-term investment if properly researched. Don't watch Flip or Flop and think you are going to buy a rehab, flip it in 30 days and make a killing. Like any investment, knowledge and research (and a little luck) can make it work. Real estate investments get better with age.” -- Shawn Schulze of HomeArea.com
Make sure you can afford to pull funds away from your business.
“For an established business owner that has the system figured out and the company is running on autopilot, bringing in consistent and predictable funds, then yes. For the startup founder that isn't financially stable yet, then no. It really comes down to financial situation.” -- Tom Munroe, CEO of RugStudio
Acquire your office building.
“Don't forget to think of your business as an investment, so look at commercial property. If you see your business staying in the same location for a number of years, consider buying office space. You are going to be paying rent anyway, so why not build wealth at the same time.” -- Ari Evans of AAA Handbags
Focus on the right kind of properties.
“Of course. It is and always will be. The demand for rental homes or commercial property is always going to increase as the population expands and more businesses are started. The key is to invest in the right kind of properties and in the markets that show promise. Research and due diligence is key.” -- Christopher Dziak, CEO of Pure Nootropics
Proceed with caution.
“After the 2008 crash, anyone looking to invest in real estate should be extra cautious to do their due diligence before making a major investment. There are plenty of ways to invest in real estate without dealing with a physical property. One option to consider is investing in real estate notes.” -- Joseph W. Belluck of Belluck & Fox, LLP
