At some point in your journey as a real estate investor, you may develop the desire to quit your current job to pursue real estate investing full-time.
It sounds exciting, right? It is, but you’ll need to have a solid plan to replace your income before jumping ship! Before you quit your full time job there are many questions to ask your self. You will have seen the countless TV programs on property "flipping" and how easy it all looks when the tradesmen are lining up on the Home and Garden Channel to work on the projects and you never really see the stress behind the job.
It may be that you have recently bought a property, done some renovations and "flipped it" and perhaps made your whole years salary in one flip! This would give you a great feeling of confidence but did you factor in all the situations such as current market conditions, home affordability and how rapidly changing market conditions would impact your plan moving forward? The Kamloops market is strong right now (2020) and houses are selling quickly but conversely finding investment property is tougher now than ever. You could find yourself in the position of being in multiple offers and overpaying for your target property. It’s very difficult to compete against buyers who plan to live in a property. Many of them are willing to overpay because they’re making their decision based on emotion, not profit. This is simply not an option for anybody flipping properties. You need to make your profits now! There are always deals to be found, but you could soon come to realize that the stable income that you had is now key in this tougher market. Maybe you should start thinking about multiple ways to generate income before quitting my job.
Here are 5 ways you can generate income as a full-time real estate investor!
1. Flipping Properties
Flipping (buying, renovating, and selling) properties is the most common strategy investors use to generate income quickly, but there are many things that can go wrong. The most common issues are overpaying, underestimating the cost of the renovations, overestimating the after repair value, and hiring the wrong people. If you’re going to attempt this strategy, it’s best to consult with an expert in advance. Learn from their mistakes and successes so you can save yourself thousands of dollars and avoid sleepless nights.
2. Become A Real Estate Professional
Investors often spend a lot of time visiting properties, which is exactly what a Realtor® does. Becoming a Realtor® is a great way to earn money when you buy, and save money when you sell! It’s also a great way to generate extra income buying and selling properties for your friends and family. Alternatively, you could also consider becoming a Building Inspector, Property Manager, Home Stager, Design Consultant… The possibilities are endless! Before you jump into any of these options, be sure to consult with other investors who have walked this path before you! Find out if they’re happy with their decision, and if they would have done anything differently in retrospect!
Full-time real estate investors typically have a lot of real estate knowledge. Why not use this knowledge to help others? You may find that folks are always phoning you to ask your advice on a particular property, you may be reluctant because you don't consider yourself a professional in that field but if you are good at something then you are doing something right. Try it you may like it and now your education and experiences are now benefiting others. This, combined with practical experience, makes it very easy to attract coaching clients, even without marketing yourself as a coach initially.
4. Become a landlord
If you have some money available to you, you can buy property then become a landlord and rent out the property. If your clever with buying the right property and get good financial advice you can even free up some equity in your rented homes to buy others. Always take expert financial advice in regard to any credit matters as its easy to get caught out in a market change. Make sure your budget covers all eventualities (lost rent, repairs etc.)
5. Get Creative
Once you become an entrepreneur, the way you view the world will definitely change! You’ll realize opportunities are everywhere! The only problem is how do you monetize them? The best way to figure this out is to surround yourself with other entrepreneurs, particularly ones who are always focused on turning their ideas into profit! Big-picture thinkers are a great source of inspiration and you can learn a lot from watching them in action. Each week, set aside some time to think about new income-generating ideas. Then think about who you know who may be able to help you turn your idea into a reality, either as a partner, a service provider or a referral to others.
You’ll likely have to own many properties before you’ll generate enough cash flow to replace your income. Unfortunately, you can’t pay your bills with equity, which is why it’s so important to consider different options when it comes to generating multiple revenue streams as a full-time real estate investor.
Always get advice before handing in your notice to quit and speak to others who have experience in the field.