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5 Questions to Ask Yourself Before Investing In Real Estate

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Don’t make a decision that may cost you thousands. Before you start your journey into investing in real estate, consider these key questions first!

5 Questions to Ask Yourself Before Investing In Real Estate

Over the last 100+ episodes, we’ve featured a handful of real estate investors. And with the crazy housing market we’ve witnessed over the last year, we’re seeing many more people pivot into investing in real estate.

At Yo Quiero Dinero, we want to equip you with the tools you need to make your own financial decision. Here are some questions you should ask yourself before investing in real estate:

5 Questions to Ask Yourself Before Investing In Real Estate

1. Are My Personal Finances In Order?

As Jannese reflects on her stint in real estate investing, she notes one mistake: not accounting for hidden costs.

If you don’t have your personal finance in order, a mistake or unexpected cost could put you in a lot of risk. Have you budgeted for your closing costs? Property insurance? Vacancy costs? The bottom line is that you want to ensure your bases are covered—even the ones you don’t expect yet!

By ensuring you have your personal finances in check, you are preparing yourself for the necessary money management that will be happening. As a first step, we always recommend conducting a level of a personal finance audit to better understand your financial situation.

Check out Episode 139 with Tom Brickman to hear about some of the risks with diving into real estate without a solid grasp on your finances.

2. How Much Time/Energy Do I Want to Spend When Investing In Real Estate?

Be clear on whether this investment strategy is one you want to expend a lot of time into, or want to take on more passively. Some investors aim to make real estate investing their main form of income. People in this bucket go all-in, either through an online real estate marketplace platform like Roofstock, or through independently building your own portfolio through connections, online searching, etc. Sometimes this even means being on the ground with your property. Think: designing the interior, doing some of the fixings yourself, managing your property, collecting rent, it truly all depends on the level of involved you want to be.

Others choose to invest in the real estate market passively as a way of profiting off the market without expending a lot of energy into it. Start to consider some of your long term goals and current life realities. This can look like investing via REITs, as an example.

Your answer here will also determine whether or not you want to build a team to support your real estate investing or if you want to do it solo.

3. How Far Am I Willing To Go, Geographically?

People living in high cost of living cities who are interested in real estate investing are often dissuaded from pursuing this investment vehicle. This is understandable, as real estate can be quite expensive in these cities. But unless you plan on handling all aspects of your investment property, you don’t need to stay within your state. As you consider out of state real estate investing, ask yourself how far you’re willing to go.

4. What Is My Tenant Screening Criteria?

If you are planning on doing rental real estate investment properties, think through your renting criteria. Some renters focus on credit checks, others on income—this depends on what you are most comfortable with. Ogechi from Episode 57 recommends picking what your criteria is and sticking to it as much as possible as you screen tenants.

5. Which Type of Real Estate Investment is Right for Me?

Answering the previous questions will make answering this one easier.

Investing in real estate can look many different ways. Most real estate investment types will fall into two main categories: the traditional, physical real estate and the passive, non-physical property type. When starting your real estate journey, you will want to give some thought to which entry point you are most comfortable with. Do you want to be hands-on and even managing? Or do you want to passively invest by not being super involved with the actual physical, real estate industry? You will be able to answer these questions as you learn about the many different types of real estate investments.

The Bottom Line

If you are interested in investing in real estate and are here reading this piece, you’re taking a great first step towards preparing for your journey. For more guidance on real estate investing, check out these episodes:

Check out these Yo Quiero Dinero partners to accelerate your journey towards investing in real estate:

Investing in Real Estate without the hassle through Fundrise

  • Have your advisory fees waived for 90 days when you join!

Purchase Turnkey Rental Properties Through Roofstock

  • Roofstock makes investing in single-family rental properties radically simple.


Download our FREE 14-page guide covering all the topics you need to start making your dinero moves. Visit here. From money mindset, to budget basics, we’ve got you covered.

*This post may contain affiliate links and I may earn a small commission when you click on the links at no additional cost to you. This helps us provide you with free content, like this blog! You can read my full disclaimer here:


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Meet Jannese

Jannese Torres is a award-winning Latina Money Expert, Educator, Speaker, Writer and Business Coach. She became an accidental entrepreneur after a job loss led her to create a successful Latin food blog, Delish D’Lites. Now, she helps her clients and listeners build successful online businesses that allow them to pursue financial independence and freedom.

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8 Responses

  1. I found it interesting when you explained why we should evaluate how much time we’re willing to use when investing in real estate. The other day, my wife and I talked about how we are interested in having another source of income, so we’d like to know more about real estate investing, and we think your article will help us out. We appreciate your advice on setting up our goals before deciding to become full-time investors.

  2. Thanks so much for talking about how time-consuming it is to invest in real estate. My uncle has recently got into real estate and he’s been wanting to do a bit more investing. He’s been looking into finding an agent to help him understand the processes involved.

  3. By honestly assessing these factors, individuals can determine if real estate investment aligns with their objectives and if they are adequately prepared to navigate the challenges and rewards of this asset class.

  4. I just stumbled upon this insightful blog post, and I must say it provides a comprehensive guide for anyone considering diving into real estate investment. The author’s emphasis on thorough research and due diligence resonates with me, as these are undoubtedly crucial steps before venturing into such a significant financial commitment. The breakdown of potential pitfalls and the importance of understanding market trends adds a layer of practicality to the advice. Kudos to the writer for offering valuable insights and a reality check for those eager to explore the realm of real estate investment. I’ll definitely be bookmarking this page for future reference!

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