When you have a family, your financial choices are different than when you are single or even when you are married without children. Your goals and needs will be different, and you will use your resources in different ways. This doesn’t mean that your real estate goals need to be put to the side. Real estate investment can be a great way to build generational wealth.
Consider the Type of Investing You Want to Do
Do you want to build a portfolio of properties that allow you to draw a monthly income, or are you more interested in purchasing homes to revitalize and resale? Having a clear idea of where you want your investment dollars to go prevents you from wasting time on properties or investment deals that don’t bring you closer to your goals. There are advantages to both types of investing. Rentals allow you to bring in a reliable source of income. You do need to account for vacancy periods and unexpected expenses, but overall, your monthly income from rentals should be predictable.
Of course, being a landlord does come with its own set of headaches. You can off-load some of this responsibility by employing a property manager, however, in the end, the owner of the property has the final responsibility. Purchasing homes with the idea of doing repairs and updates to resale allows you to make a nice profit on your investment, however, the income is not as predictable. Also, in the beginning, at least, any gains will likely be rolled back into a new purchase. After several successful flips, you may be able to comfortably take some compensation, but flipping houses is more of a long-term investment strategy.
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Balancing Real Estate Investment with Responsibility
Early in the real estate game, you may find that your investment seems more like a hobby. There is no real money coming in, but you are spending time and money on it. It may seem indulgent to spend time and money on this project when you have responsibilities at home. Don’t be short-sighted. If you make smart choices, your time and money will be rewarded. As long as you can meet your monthly obligations, devoting funds to your projects will pay off down the road.
It can be challenging to go against the status quo and spend money that you feel should be directed at retirement or your children’s college education. Your long-term strategy is to build wealth for later. There are other ways you can help your children. For example, as a student loan cosigner, you can help your child qualify for private student loans to help fund their education.
Keep an Eye on the Finances
While you shouldn’t expect to turn a profit overnight, you do need to keep a close eye on your numbers. It is easy to let the cost of projects creep up without realizing it. Delays, change orders, and aesthetic choices can all dramatically change the cost of a project. Building a successful real estate business requires you to keep a close eye on your budget.