…Ask yourself a few questions before leaping into the world of real estate investing. Do I have what it takes to be a landlord? Being a good landlord requires business savvy, people skills and a clean and orderly financial house. If you aren't willing to be firm (but fair) with problematic tenants, read the fine print on contracts, negotiate with lenders and occasionally roll up your sleeves and patch that roof yourself; you may want to consider investing in mutual funds instead. How's my credit? Lenders require bigger down payments, higher interest rates and stricter terms for investment properties because people are much more likely to default on a mortgage for a rental property than their own home. As such, it is best to have all negative items, overdue payments and high-interest debt paid off before you seek financing for your investment properties. How's the market? Research the market in your area and familiarize yourself with trends. Buying into a failing housing market will never make you money; no matter how many improvements you make on the property. How committed am I? Depending on market conditions, the ideal amount of time to hold on to an investment property varies. While property values will likely rise steadily over decades, you may find yourself hurt by a temporary dip if you only intend to own the property for a few years. Also note that a property will likely need major improvements over the long run.

Can I network? Property management is a business where "who you know" helps as much if not than "what you know." Finding good contractors, building trust with lenders and, of course, finding reliable tenants is key to successful real estate investment.