Developing achievable saving and investing goals can help establish a sense of financial security and pave a path toward financial freedom.
Take the time to create a personal investment plan. This overall will tell you how much funding you have to put toward real estate investing and what you would expect in returns.
Ask yourself these questions before you get started with your investment plan:
What do I want to accomplish with my investing?
- Set specific investment goals. Be sure to include target dates and dollar amounts so you have a realistic idea of how long it will take to achieve your goals. Not all of your investing goals have to be real estate driven. Real estate is one funding option and one you have more control over than actual financial market investments like in stocks or bonds.
How much risk am I willing to take?
- Are you willing to risk losing some or all of your money to earn higher returns, or will you accept lower returns for the peace of mind of knowing your initial investment is safer? Understanding how much risk you are comfortable taking determines your “risk tolerance.” This informs which investment products are most suitable for you and can help guide what real estate opportunities may work best for you.
What type of investment is right for me?
- Each investment comes with specific characteristics, risk levels, and potential returns. Understanding your situation is essential because it can quickly make or break a real estate transaction. From your risk tolerance, time horizon, and specific goals, you must determine the best investment for you. We recommend speaking with a lender if you plan to borrow funds for the real estate investment, and they can help determine what your financial position is and can be.
Am I comfortable enough to do this on my own?
- How much time are you willing to spend sorting through investment choices and keeping up with the markets? How confident are you in your investment knowledge and ability to carry out your decisions? If you need some guidance, you may seek the services of a financial services professional and a real estate professional, in addition to a lender. Investing, especially with significant amounts of money, can be a complicated process, and many seek help from one or more financial services professionals.