How to Decide What Types of Properties You Wish to Own
August 11th, 2006 (Real Estate)
There are many different types of real estate you can own. Not all real estate will “turn you on.” Why is this? Because:
A) Some people don’t enjoy dealing with tenants; they want to conduct their rental business by mail.
B) Other people enjoy meeting, and dealing with, tenants. “Being there” is half the fun of making money, for them.
C) Some real estate in your area might require lots of fixing up before it will give you the income you seek. Such work may, or may not, appeal to you.
To decide what types of properties you want to own, do some self-analysis. On a piece of paper separate from this book, enter answers to the following questions:
- Do I enjoy working closely (face to face) with people?
- Would I rather be at a distance from my tenants?
- Would tenant problems such as those met in multifamily buildings (apartment houses) “bug” me to the point where I would give up the business?
- Are shopping centers and strip malls attractive to me, knowing that they do involve lots of negotiations with tenants?
- Should I consider only raw land to be held until it rises in value, giving me no tenant problems or negotiations?
Answering these questions quickly tells you if you’re a “people person” or a loner. If you’re a loner, that is, if you don’t want to deal with too many people, you should consider owning factories or industrial, commercial, or warehouse buildings. Why? Because you will usually deal with fewer people in such structures.