Many real estate investors debate on whether or not they want to remain a part-time investor or allow it to become a full-time endeavor. After all, some investors have day jobs they enjoy and find fulfillment in. Investing in real estate is just a way have an extra source of positive cash flow. Full-time investors, on the other hand, may find themselves feeling liberated by their investments with the opportunity for both financial and occupational freedom.
For some of us, real estate investing feels more like a calling than a hobby. Setting the DVR to record the weekend fix and flip TV shows simply wasn’t filling the void we felt when we wanted to be actively working on investing in real estate.
The leap from being a part-time investor to making it your full-time job can be nerve-wracking; any career change is! If you’ve considering turning to full-time investing but aren’t quite sure, let us help.
How I Bought, Rehabbed, Rented, Refinanced, and Repeated for 14 Rental Properties
This is the dream right? Going from zero to 10+ rental properties, providing stable cash flow and long-term wealth for you and your family, and building a scalable business model to boot! Learn how this investor did just that, in this exclusive story featured on BiggerPockets!
3 Signs You’re Ready to Be a Full-Time Investor
You always feel like you’d rather be investing.
Do you find your day job a chore? Do you feel more excited about your investments than anything else work-related? Even worse, are you day-dreaming of how great your current investment project will turn out when you are supposed to be working on your current day-job project Life is simply too short to hang on to a career that you don’t find rewarding and fulfilling, personally and financially.
Remember, though, that everyone gets the itching feeling to chuck it all and start a new adventure. That doesn’t mean it’s right for you right now. Give it some time and don’t make a decision based solely on emotions. Just because you’re chomping at the bit doesn’t mean you’re ready to take the leap.
The decision to go full time is a big one, and simply yearning for something new or allowing day-dreaming to get in the way of what pays the bills can be dangerous. Be smart and calculated, and take your time. Don’t make the jump simply based on feelings.
You feel like your job is holding you back from investing.
Investing in real estate, though it has the potential to be as passive as passive can really get, still demands time, thought, and energy. Maybe you’ve found you have a real knack for real estate but can’t devote as much time as you’d like to those pursuits due to professional obligations. If you feel like your full potential isn’t being reached and you’re not feeling satisfied in your current career, you just might want to look into full-time investing.
Don’t discount the warning in that first sentence, though. Like any profession or full-time job, the bills do not get paid on wishes and wanting. Being great as a professional real estate investor takes time, devoted thought, and a ton of energy. Harking back to those TV shows: They make things look so easy, but know that the hard parts are left on the editing room floor!
You’ve maximized what you can do with your investments part-time.
We all have limits. Some things (like day jobs) narrow those limits. With any investment property, we encourage maximizing its passive income potential and efficiency before adding too many new properties to your portfolio. For the part-time real estate investor, having a large portfolio isn’t always feasible, if only for the time crunch. You don’t want to spread yourself too thin as any type of investor, and it’s even harder when you have another job to take care of. If you’ve hit a wall with your investments but want to go further, maybe it’s time to change.
Of course, even if you’re experiencing all the signs and decide you want to make the transition to full-time real estate investing, there’s more you need than just desire.
3 Keys to Full-Time Real Estate Investment Success
A Solid Business Plan
Every investor needs solid, well-developed business plans to more effectively use their time and resources, as well as mitigate risk. Talk to other full-time investors about making the switch. Do you want to hire staff to help you out? What roles? What do you want out of your team? How do you register a LLC? What about taxes? What are your goals for the business? Remember that running a business is a lot different than working for one. There’s a lot of groundwork to be done if you’re going to do it right.
Experience to Leverage
Ask yourself: Do I have the experience to make this business successful? Not every real estate investor is immediately ready to hinge their entire livelihood on their investments. If you have a record of success and understand the business enough to take on more, do it! Having a few solid years of experience under your belt, good connections, and good mentors will help further your goals and accelerate positive cash flow.
Time & Capital
There’s going to be some aches and pains in the beginning. After all, you’re cutting of a stream of income when you decide to go full-time with your real estate investments. That makes a lot of people nervous! Have you done the financial planning necessary to ensure that you’ll be able to cover all the costs of turning your investments into your full-time job? Do you have the support of banks or private money lenders? Just like when you buy a property, you can’t neglect to crunch the numbers. Understand that embarking on a new chapter is going to cost you in time and money, and you’ve got to plan for both.
Are (or were) you content as a part-time investor, or would you like to go full-time one day?
Share your thoughts in the comments.