What type of real estate investor are you?
If you’re just getting started in the real estate investing arena, you may not know which kind of investment option is right for you. To determine that, first, you’ll need to figure out what type of real estate investor you are.
Even if you’ve spent a few months or years buying and selling properties, knowing your type could be fruitful in the long run.
Which of the following suits you best?
If you’re a highly responsive, dynamic person who isn’t afraid to jump into things – you’re the entrepreneurial type, and likely very creative. If that describes your personality, then you’d likely be successful flipping homes (or perhaps you already are?)
House flipping calls for a real estate investor who’s not too worried about making mistakes. even if they do make one, they’re able to laugh at their mistakes (and learn from them). What matters for them is that they tried; it’s a life well-lived. They’re someone who takes action and is resilient no matter what happens.
It’s not difficult for these folks to adjust to market conditions.
Those who prefer a very calculated approach to everything love developing systems, data, and research. They evaluate every angle possible to avoid mistakes. Such people can, too, find great success by taking carefully planned baby steps.
If you’re among them, you’d be best suited to real estate investments that allow you enough time for research. Consider picking a niche, such as multi-family property or commercial property, as these usually require a long-term contract—and are less likely to involve fast-moving bidding wars.
This would give you enough time to review paperwork and conduct online research. The ‘buy and hold’ strategy is also a great match for you. Unlike take-charge real estate investors, flipping houses can be very stressful for you because it necessitates making quick decisions. You’re keen to buy for the long-term; after all, investments are like a marathon, not a sprint!
When you’re in charge, you like for things to always go your way. You’re disciplined, self-motivated, and care a whole lot about the bottom line. These people prefer setting up a solid foundation while managing everything from a position of power.
Such personality traits are beneficial for real estate investors who would be managing real estate agents, property managers, and contractors. However, it’s important to find a balance here. While it’s good to be focused on your goals, if you’re too impatient, domineering, or demanding, it’s recipe for disaster.
Real estate is all about relationships; showing a little kindness would help you in your career as an investor.
If you’re involved (or would like to be involved) in day-to-day activities of property investment (such as fixing an HVAC system) and making sure everything is well-maintained, then you’re likely devoting all your working hours to real estate.
If that’s the case, you’re an active or full-time investor.
On the other hand, if real estate investing is your side gig, you’re a passive investor. That’s not to say that you aren’t passionate about the field—you just don’t have the hours to commit yourself fully to it.
And, if you’re a passive investor, hiring a property management company that can handle the financing, maintenance, marketing, and management on your behalf is a great option to explore.