Small property investors generally do not start out with investing in mind. It is rare for first time buyers to purchase a large first home or apartment building. Many of them bought a starter home and lived in it until it was too small for their family. When it came time to buy a new home, these people found they could afford a mortgage on their new property without selling their present house. Many decided to rent out their first home as an extra source of income.
Retaining a first home and renting it out is a bootstrap property investment operation. People that do this are generally considered small investors. They may purchase several more single homes or duplexes with the income from the first property. A small apartment complex might also fall within the realm of their finances. The decision depends upon how much time they are willing to spend managing their property.
It takes a great deal of time and effort to manage investment properties. If the property is empty, tenants must be found. This entails advertising as well as background and credit checks. Many property investors have full time jobs or careers, and they do not have much time to spend renting out their property. Maintenance is another area where many small investors find a time crunch. Eventually, these investors may find it is easier to hire a management company for their property. If they find a good one, chances are they might be willing to invest in more properties.
Making the choice to invest in property is a huge decision for most single people or couples because of the time necessary to keep an investment growing in value. Managing their investment takes work to maintain the property as well as find responsible tenants. Small investors generally fall into the market through good economic means rather than setting out to make it a career.