People tend to think that real estate investing is passive. But that couldn’t be further from the truth, according to landlord Becky Nova.

In her experience, being a landlord is best suited for certain types of people. “I think it’s important for people to always invest in things that they understand. If you are going to invest in real estate, you need to know your numbers, and you need to understand people,” says Nova, a real estate investor who owns 10 properties.

Based on her experience, Nova says there are two types of people who should invest in real estate.

People who want to own tangible investments

Compared to stock market investing, investing in real estate is much more tangible. Sometimes, it even involves hands-on work in a way stock investing never could. Nova says that this could be a big plus for anyone who’s motivated by the idea of more tangible investments.

For her, investing is better when she can see what she’s investing in. “I can see when I get paid on a monthly basis as a landlord. Those numbers are much more tangible than money sitting in an investment account that I can’t look at for another 25 years,” she says.

People who are good with customer service and research

In some ways, being a landlord is more akin to working in customer service than it is to being an investor.

“It is a people management position when you’re dealing with tenants,” she says. Dealing with tenants and clients at all hours of the day is routine for landlords.

And it requires a lot of organization and research. “You have to be educated, and you have to understand the legalities involved,” she says. Many cities have laws in place to protect tenants, and as a landlord, it’s your responsibility to know them.

In her experience helping other landlords, she finds that a lot of successes and failures come down to the amount of research and forward planning done.

“One question that I get all the time is, ‘There’s a problem with this tenant and I don’t know what to do.’ Usually, the answer should be addressed in your lease, but I feel like a lot of people skip those steps,” she says.”They don’t have a process put in place, which makes it very confusing and very stressful for both the landlord and the renters.”

Knowing the laws and how to work with people are both critical qualities for anyone who wants to invest in real estate.

“You have to understand the ins and outs,” she says.

Source: Business Insider

Polk & Associates

Large enough to serve a diverse clientele, yet small enough to maintain a hands-on approach, we are committed to maintaining the highest accounting and ethical standards with continuous education, extensive research resources, and excellent quality control.

Polk and Associates is a member of the Michigan Association of Certified Public Accountants, and the American Institute of Certified Public Accountants. The firm participates in the AICPA Peer Review Program, and has always received the highest level of award for its audit practice and quality control.