Thinking about buying an investment property? Smart move! But if you haven’t bought a lot of properties before, you may not be sure about what’s a good property or how to invest in the right away. To help you, we’ve created a list of 3 questions to ask before buying your first investment in IL …
Remember opening a gift as a child? There was the anticipation of what gift was inside the wrapping, the excitement of taking off the layers of gift wrap, and the final seconds just before seeing what gift you received. And then the elation or the let-down depending on whether you really wanted that toy or if it was a sweater knitted by your aunt.
When buying your first investment, there are similar emotions that build up to the moment that you put the key in the lock and open the door. Will this investment live up to its expectations or will you end up being disappointed?
The answer lies in answering these 3 questions to ask before buying your first investment in IL…
Question #1. Have I done my homework?
This first question can be easy to answer but few people think about it. Doing your homework means making sure that this is a good investment compared to other options.
You have probably heard the formula, “look at 100 properties, put in offers on 10, buy two or three”. But all too often, beginner investors getting hyped up, rushing out with a real estate agent, looking at 4-5 properties, and buying one of them.
You don’t need to look at 100 properties because a good wholesaler will do a lot of that for you but you should still learn how to analyze the numbers so that you are comfortable and confident with your investment choices.
Question #2. Is the timing right for me?
Is the timing right for you right now or do you need to rearrange your money so you can invest when you’re ready?
Many beginners buy a property but they haven’t thought through their current financial situation, their ability to add another activity to their schedule, nor their current life stage. If you don’t know your own financial situation, you may struggle and worry way more than necessary.
Preparation and knowledge always trump hope when you are looking to buy your first property. Figure out your timing and you’ll save yourself the stress and actually accelerate your path to financial freedom.
Question #3. Will this investment take me closer to my goal of financial freedom?
Most people find an investment property that will pay them several hundred dollars a month and they get excited about the cash flow but they lose sight of the steps involved in achieving financial freedom.
Think about what your current expenses are and make it your first goal to acquiring enough properties to cover your current expenses. At that point, you’ll start achieving financial freedom and can look at quitting your job, going part time, and investing further, to build your wealth.