Do you want to start a part-time or full-time real estate investment? Well, if you are a beginner, you might be stuck in making the right decision.
This blog explains how to venture into real estate, whether full-time or part-time. Being a beginner calls for cautious decision-making when trying part-time or full-time investments.
We guide beginners and veterans in real estate investment. Check out our helpful tips to help you start and manage a real estate business in Kenya.
Part-time Vs Full-time Real Estate Investment, What’s the difference?
Part-time real estate investing involves buying and selling properties on a smaller scale, usually without investing in long-term assets. This is a good option for someone new to the investment world or does not have the time or resources to commit to a full-time career in real estate.
On the other hand, full-time real estate investing involves investing in long-term assets like income properties and managing those investments regularly. If you want to make a steady income from real estate investments, you should try out full-time real estate investments.
Part-time real estate investing is a great way to start in the investment world, as it does not require much capital or experience. It is also low-risk since you are only investing in smaller properties. However, part-time investors will benefit from economies of scale, which can be beneficial in the long run.
Full-time real estate investing requires more time, resources, and capital than part-time investing, but it can be much more lucrative. However, it is important to remember that it is also riskier, so it is important to research and ensure you understand the risks and rewards associated with full-time real estate investing.
Part-time real estate investment is a good move to start real estate investment. In addition, you can always upgrade to a full-time investor if you reap good fruits during your part-time years.
Part-time Real Investment
Advantages of Part-Time Real Estate Investment
1. It’s Flexible
One of the main benefits of part-time real estate investing is the flexibility it provides. Part-time investors can choose when to buy and sell properties, allowing them to work around other commitments such as a full-time job or family responsibilities.
Being a part-time real estate investor means you can always buy during the buyer’s market and sell at the seller’s market. That idea will help you maximise your returns due to market trends.
2. It’s Cost Effective
Part-time real estate investing is more cost-effective because you don’t have to pay for full-time staff or take on the costs of full-time investments.
3. Tax benefits
Part-time real estate investors also benefit from the tax advantages of owning real estate. You pay tax as a property owner when the property is in your ownership.
4. You can handle other things
Being a part-time real estate investor allows you to try other investments if the property market is doing badly. You can invest in other things like cryptocurrency until you feel like returning to real estate.
Disadvantages of Part-Time Real Estate Investment
1. No control
One of the biggest drawbacks is the lack of control. Part-time investors may not have the same level of control over their investments as full-time investors have. They may also lack the time, resources, and expertise to manage their assets effectively.
2. Less experience in real estate investment
Part-time investors may not have the time to access some resources, such as networking or educational opportunities, as full-time investors.
3. Less access to capital
As a part-time real estate investor, it’s usually a challenge to access funds to invest in real estate, especially when you don’t have stable employment to secure a mortgage. Therefore, it’s more difficult to acquire and manage investments.
Full-Time Real Estate Investment
Advantages of Full-Time Real Estate Investment
1. You have all the time to invest and manage properties
Being a full-time real estate investor allows you to leverage your time. You can focus exclusively on building your portfolio and making money from real estate. In addition, it’s possible to build a professional network with vendors, brokers, and other investors.
You also have time to attend more meetings and seminars to stay on top of the latest trends in the real estate market. Additionally, you can use your time to analyse the market and make more informed investment decisions.
2. You can get more opportunities
You can take advantage of more opportunities in the real estate sector. As a full-time investor, you can be more attentive and responsive to potential investments.
3. You enjoy tax breaks
You can also take advantage of more tax breaks and deductions due to the nature of your full-time investment activity. The Kenyan government has an incentive for investors that motivates them to invest. For instance, as an investor, you can get tax deductions due to the depreciation of buildings or construction and repair costs.
4. It’s easy to manage your investments
If you devote your full time to real estate investment, you can manage your properties more effectively. Even when you hire property managers, you will still have time to see how they do their job. This helps you to notice any wrong directions earlier and act accordingly.
5. You build wealth and long-term income flow
Being a full-time investor allows you to build income streams from your income properties. In addition, the more you keep improving and investing in more income properties. You are slowly building your net worth, which can help you secure big loans in the future if need be.
Disadvantages of Full-time Real Estate Investment
- Market changes can frustrate you
If we take the example of 2020, when Covid -19 hit the world, in Kenya, most people lost their jobs and left urban centres for their rural homes. That left many rental apartments vacant, reducing the income of the investor.
- Property in a bad location can frustrate you
The main factor that determines your success in real estate is the location you choose to buy or build your income property. If you invest in a non-desirable site, you will struggle to resell or rent the property.
Conclusion
Now you’ve seen both sides of real estate investment. You can choose the bets that you can manage. However, if you are a beginner in real estate investment, you can start with part-time investment, like being an agent. This helps you learn the industry fundamentals before investing full-time.
What are your views on full-time or part-time real estate investment? Let’s connect in the comment section. We will be glad to engage in communication.
Frequently Asked Questions
Which is the most profitable real estate investment?
This is the number one question you should ask yourself before investing in real estate. Commercial real estate leads in terms of returns on investment. However, the rate of ROI depends on many factors, such as the commercial property’s location, size, etc.
What does it mean to be a full-time real estate investor?
To be a full-time real estate investor means you spend all your time investing in real estate, whether commercial or rental.
Can real estate investing be a full-time job?
Yes. You can choose your career path in real estate investing. However, to succeed in the industry, you must be ready to learn first what types of investment you can venture in.