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10 Questions to Assess Your Succeess in Property Investing

By: Adrien Brody

Do you have what it takes to succeed in rental property investing? By this, I don't mean financial assets like cash and credit. While these are important, what's absolutely essential is having the right psychological makeup, the intangible assets to make it.

Just as with any great business opportunity, real estate investing is not for everyone. That's because, contrary to popular get-rich-quick gospels, real estate investing requires a lot of hard work and personal sacrifice. You are obviously willing to make a time investment.

What are the intangible assets you need to succeed in real estate? Ask yourself these 10 questions.

#1 Can I stomach the risks?

You must overcome your fears of failure as nagging negative thoughts run through your head, like:

- What if I buy this house, fix it up, and nobody rents it? Okay, is that a realistic worry? You may need to adjust the rent or be creative. But the chances of never renting are slim.

- What if the house generates negative cash flow? How will I keep from losing my shirt? No one recommends negative cash flow, so don't go into a deal that appears to be negative from the beginning. However, if you have a setback, like more repairs than you anticipated, look at the numbers. This is not where you want to be, but don't let the fear of this keep you from pursuing the possibility.

- What happens if my tenants make two payments and walk out after trashing my property? Yes, this is possible, and if you stay a landlord long enough it may happen. Do some research of the probability of that happening.

- Who do you know who is a landlord now? I was amazed to find out how many people in my church and how many of my friends' parents had rental property. Ask them how many times they have had a renter trash the house in two months. If you have enough properties this may eventually happen, but chances are slim it will happen on your first house. That is why we get credit applications on prospective tenants.

- What if my house catches on fire? That is why we have insurance. I would encourage you to meet your property insurance agent for breakfast or lunch and discuss details about what is covered and what is not covered. He/she will have some wonderful insights and might be able to hook you up with a client who could act as a mentor to you.

- What if an eyesore like a gas station is built next door and devalues my property? You can do your part to reduce this risk by doing your homework. Check to make sure there are no rezoning plans for the immediate location around your prospective property. If you buy a house in a subdivision you have drastically reduced that chance. If you can stomach the risks, you'll do fine. Just make sure you go into a venture with your eyes wide open and make low offers.

#2 Do I have the time to devote to this?

If you travel several days per week and have two small children at home, you may not have time to do this. Count the cost (in time) before you dive in. This way, you're committed to spending whatever time it takes to succeed. If you feel guilty about the time, you will not enjoy the work nearly as much.

#3 Do I have the hunger to keep learning and growing?

Knowledge is literally power. The more you learn about the business, the more money you'll make and the less money you'll lose. Do you understand mortgages? Do you like to deal with people? Do you like to work with your hands? Do you know how to paint? Do you know how to fix a toilet? Do you know how to fix a leaky faucet? Do you know how to research problems and find a solution? Identify what you need to learn and then focus your time and resources on acquiring the knowledge and skills you need to overcome the deficiencies.

#4 Do I possess an opportunity mentality?

What one person sees as a dump a savvy real estate investor sees as a potential cash cow. You need to see opportunities where others do not. The smell of opportunity is cat urine. When you walk into a house that literally stinks and you can immediately knock $10,000 to $15,000 off the asking price. New carpets and paint might cost $3,500. Cosmetic problems will turn off 99 percent of the people looking at a house. You have to look at this house through rose-colored glasses. See the house as it will be when renovated.

#5 Am I self-motivated?

As motivational guru Zig Ziglar puts it: "If you do the things you ought to do when you ought to do them, a day will come when you do the things you want to do when you want to do them." You are the boss on this project. No one is going to watch over your shoulder and encourage you. You must be your own motivation.

#6 Do I have access to financial reserves?

Do you have a savings account, an equity line of credit on your current home, or credit cards for repairs, advertising expenses, and so forth? Don't forget to look beyond your finances to other people's money. What if you do the work but Bob supplies the money? Having the money is different from having access to the money. You just need the access!

#7 Do I have access to partners?

Who can I call on to help me? Two people going in together on their first deal might have a calming effect on both. They might team up for financial reasons or for simple collaboration. I consider my wife a partner, and she was my sounding board on many occasions.

#8 Am I coachable?

Am I willing to learn, change my habits, and forgive myself for mistakes? I hope you have already begun to learn from this book. As for mistakes, they are only truly mistakes when you don't learn from them. You will read about several changes I would have made to my first success story. I'm not mad at myself for making mistakes--I didn't know any better--and next time there will be fewer regrets. I'm still proud of myself for doing the first deal. To get the first deal behind you is a wonderful feeling. The second rental property will be so much easier--and I bet I make some mistakes there, too!

#9 Am I able to withstand criticism?

What if my family and friends think I've lost my mind--will I be able to stand up to their ridicule? Let me make a suggestion here. If you know family members or friends will not be supportive, then don't tell them. Currently my father-in-law does not know about our rental house. As a child of the Depression, he would have lost sleep for weeks worrying about our debt. That was my job! I didn't need company. What good would come from telling him? Chances are you will find your friends and family to be more supportive than you expected. I had much more support than I expected.

#10 Am I sophisticated and wary?

Will I see at least 10 houses before I put an offer on a house? We all want to put a bid on the first house we look at. Will I resist the temptation to buy something I really don't feel comfortable with? Know the difference between nerves and that old gut feeling.

If you answered "yes" to each of these questions about yourself, you stand a great chance for success. Whether you're looking to become a big-time real estate mogul or simply to earn part-time, supplemental income, this book will show you how to take the first critical steps to make it happen.

Article Source: http://www.articleresourceindex.com

Adrien Brody (propertysmarty.com) is a business writer specializing in finance and credit products and has written authoritative articles on the finance industry. To take advantage in managing your investment, make sure you visit leasepurchaseinvestment.com

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