Real estate is one of the most alluring forms of investment, and it isn’t tough to see why so many people see the appeal in it. There’s a lot of marketing and media attention given to real estate moguls and in the pursuit of an image, you might find yourself running a hundred miles an hour down a road you never really wanted to get on in the first place.
If you’re starting out and don’t have a dozen properties to your name already, or you’re really working hard and saving up so you can afford your first property, you need to ask yourself this before you slide down the rabbit hole. Believe it or not, brute forcing your way through any doubts you have may not be the best option here.
So, you ready? Let’s begin. These are tough questions, but like any other thing in life, sometimes you need some straight answers.
• Why are you investing in Real Estate?
Ok. This might sound like a basic question, and I know what you’re thinking – Duh! Of course because I want to earn money. Right?
Well, guess what, so does everyone else. No one enters an investing venture because they want to lose money.
The problem with ‘I want to earn lots of money’ is that it’s too vague. How much money do you want to earn? A lakh per year? 10 lakhs? How about a crore? You see how your course of action might change depending upon your answer here? Be clear.
If you want to buy a yacht and the best sports car money can buy, admit it to yourself and write it down. If you just want to create enough passive income so that your family doesn’t have to worry about their finances ever again, write that down too. Whatever you want to do, make sure you have a clear idea in your mind about it before you begin.
Be truthful to yourself above everything else. Let us continue.
• What would you do differently if you had little or no time left on the planet?
Another philosophical question, you might think. That may be true, but consider this. When you’ve immersed yourself heart and soul into your business to the end that you’re fielding a hundred calls a day and emailing a dozen different people about quotations or agreements, you miss out on doing other things. Like spending a moment with your children, or going for a run.
Your dream is paramount in your life, about this there is no doubt. But if it happens at the cost of everything else, you need to weigh the pros and cons. Maybe you could delegate a few things so you have more free time? Think about it.
• What does your ideal day look like, once you’ve achieved your goals?
This is something a lot of people don’t really have a clear idea about. If I told you there was an excellent picnic destination north of here, but I didn’t give you any details or a roadmap, how would you know when you got there? What signs would you look for or recognize?
Here’s a small exercise. Say five or ten years from now, you’ve finally achieved what you set out to do. You’ve got enough money in the bank, lots of cash rolling in from all the properties you’ve invested in, the whole thing. Put yourself in this situation, and try to run through a day in your future life. What do you do when you wake up? Where are you living? What possessions do you have? How do you distribute your time? How much money do you want coming in each month to successfully pursue your other passions?
Write it down, and pin it up somewhere prominent. If you don’t see the target, you’re bound to miss.
• Could it be that you’re not cut out for real estate investment?
Look, real estate investment is a tough gig. You have to be savvy, social, know how to deal with people expertly, and make lots of profitable partnerships and collaborations to be at the top of the game. Some of us just aren’t made for this kind of life. Maybe you have other passions in life, or even if you’ve been investing for a while, it doesn’t really resonate with you.
If you’re not enjoying what you’re doing, why keep doing it? There are other forms of investment you can pursue if you have accrued the funds to do it. If you feel like you need to quit, it’s OK. It’s not the end of the world.
Here’s an interesting article, have a look.
So, by the end of this questioning session, hopefully you’ve got some eye-openers or ‘Aha!’ moments. Use these metrics as a guideline to nudge you the right way if you ever feel confused about your investing. Whatever you do, do it ethically and try to create maximum value for the people around you. That is how true success is generated.