What Type of Real Estate Investor Are You?

Before investing in real estate, it is important to understanding the different levels of involvement that you can have as a real estate investor. For some investors, real estate investing may be a full time occupation, while other investors just want to get checks in the mail. In reality, we would probably all like to just get checks in the mail, but as the old saying goes, time is money.

Now in reality, every investment and every investor is unique, but for the purposes of discussion, we will divide investors into two basic types which we will call active investors and passive investors. The reason for doing this is that it is helpful to identify the level of time commitment and involvement that you want to have as a real estate investor.

Active Investors

The active real estate investor has a fair amount of time available to commit to his or her real estate investments. They typically live in close proximity to their investment, and expect to be directly involved in the day to day management and operation of their properties. If the investment is focused on appreciation, then the investor may be involved in improving or renovating the property, hiring people to improve or renovate the property, working on subdividing the land, condo conversion, or trying to get the zoning changed. On the other hand, if the investment is more of an income producing property then the active investor may be managing the property himself, or if there is a business component then he or she will be hiring and firing the staff that will run the property for him.

Passive Investors

The passive investor does not have or does not want to commit a substantial amount of time to the management of their real estate investment. They may live far away from their investments and/or have demanding jobs. They frequently will hire professional property managers to take care of renting and maintaining their invesments. They would prefer to make a minumum of improvements or changes to their investment property. Their ideal situation is to just receive a check in the mail every month.

Now as you can see, there is a substantial difference between these two types of investors and a spectrum of possibilities inbetween them. Before you become a real estate investor it is important to identify which type of investor you want to be. Many people do not realize that there can be substantial responsibilites associated with the ownership of investment real estate, and it is best to be well prepared to handle them.

Visit my website for more information on choosing an investment property in Portland.

• Rate this Post!

  Select Your Rating:

  • 5 Stars (Excellent!)
  • 4 Stars
  • 3 Stars
  • 2 Stars
  • 1 Stars (Poor)

• Share this Post

  Share With A Friend:

  Your Name Your Email

  Friend's Name Friend's Email

  Optional Message

  Send

• Print
• Social Bookmarking

  Add to Bookmarks: