You Want to Make a Living From Real Estate Investment. When Should You Quit Your Job? When you invest in real estate with the goal of living off your income, one of the first questions you ask yourself is "When can I finally quit my job?" Here are some tips to help you answer that question.
Opinions expressed by Entrepreneur contributors are their own.
When you invest in real estate with the goal of living off your income, one of the first questions you ask yourself is "When can I finally quit my job?" And for good reason, real estate investment is a solid wealth lever used by investors of all backgrounds. However, when you start at the bottom of the ladder, and when you combine your daily job with real estate research, having a job on your side doesn't allow you to focus full-time on real estate investment.
Having a 9-5 job can therefore slow down the investment process. However, as an investor, I advise you to keep your zeal in spite of everything and to think twice before quitting your job. Indeed, work is not necessarily a brake for a real estate investment. On the contrary, it is a powerful lever for building up capital, at least at the beginning of the process.
The advantages of having a job
Work, even if it takes up your time, guarantees you a monthly income through your salary — part of which you can save. Having a job makes it easier for you to build up capital, which will allow you to invest in real estate. You can use these savings for your investments, knowing that your monthly expenses will be covered by your salary. From the mortgage point of view, having a job helps to gain the confidence of the bank and the financing organizations. In terms of borrowing, the investors do not have the same advantages as the employees. At a certain point, you may consider leaving your job. This moment may come sooner or later. It all depends on your situation. Here are some clues that may help you to identify it:
When you have enough confidence and knowledge to make a living from real estate
Work constitutes a safety net. It is essential to be able to live and also to support your family. Once you are confident that you can do this through real estate, you can leave your job without any fear. To do this, you will first need to master the risks associated with real estate investment. Generally, owning one property is not enough to generate enough cash flow to live on. You will have to multiply your investments. And to find profitable properties, there is no miracle. You will have to work and create opportunities. Investing in real estate can be learned if you want to make it your profession. Thus, you need to make sure that you have the basics in order to multiply profitable investments. Without the knowledge of key information, such as the taxation or the setting up of operations and funding, it is very likely that you will make bad investments.
When you save enough money to be able to continue your investments
Work provides some insurance with the banks or the finance agencies. If you leave your job, these agencies will not have the same level of assurance if you buy on credit. Leaving your job too soon can therefore affect your ability to finance. You will need to plan your exit plan properly by setting aside a substantial amount of money to be able to continue to invest without your monthly salary. This amount of money you have set aside will also serve you in case of a hard blow. Indeed, an investment — even in real estate — is still an investment. There is no such thing as "zero risk."
When you build up a strong network
Real estate investors do not usually work alone. They surround themselves with a network in order to make the best investments. This network is composed of real estate agents, brokers, notaries, contractors, craftsmen, accountants and so on. Thus, in order to succeed in your real estate investment career, it is necessary to build a solid network of people you can rely on. A trusted real estate agent will help you in the search for off-market properties. A good contractor will finish the work on time and within the standard. The more people you know, the more chances you have to get a good deal and increase your assets.
When you properly plan your project
Making a living from real estate is something you have to prepare for in advance. It is necessary to keep in mind that no one becomes a real estate millionaire from one day to the next. To do this, you will need a strategy and a precise action plan to move forward with your project. There are several ways to invest in real estate. These ways include investing in an old or a new property, investing in a rental property, reselling after a renovation and also crowdfunding. It is therefore necessary to define in advance the strategy you are going to adopt according to your objectives and the situation of the real estate market. It would be a great mistake to neglect this planning work if you want to succeed in your project.
So, before you go and quit your job to make a living from real estate investments, consider the tips above to assess whether or not you are ready.