What Monopoly Can Teach You About Making Money in Real Estate
Anyone who says investing in real estate is a sure thing is mistaken. Although you definitely have more control over your investment than you do with stocks, people (including me) can and do lose money on real estate. However, this is accomplished by buying bad properties, not by buying at a bad time. There is no such thing as a bad time to buy real estate.
I don't know what the market will do tomorrow. But what I've learned is that NOW is always the best time to buy if you find a good deal.
I learned about real estate early because I come from a family of real estate investors. Whenever there are big family events, we always play Monopoly quite competitively. It's not just a game to us; we do it to prove how good we are at investing in real estate.
Monopoly, the game, holds few similarities to real estate investing in the real world. But, the big secret to gaining a serious advantage in Monopoly is the same secret to winning in real life real estate investing, and it has everything to do with timing.
"Hold on," you say, "Didn't you just say you can't time the market?" While it's true that you can't time the market, and that real estate is about timing, just like in Monopoly you want to make sure you buy real estate early. That means you should buy real estate when you are as young as possible so it has a chance to increase in value. That's what I mean about timing and that's why you should never wait to buy real estate.
Everyone knows that in Monopoly the "The Objective of the Game is to Become the Wealthiest Player Through Buying, Renting and Selling Property". But if you simply roll your dice and hope for the best, then you're not playing the game of Monopoly, or life, up to your full potential. If you play this way, winning will always be a matter of luck, and it doesn't have to be.
So what are the rules of real estate investing in the real world? The first and most important rule is 'what do you hope to accomplish with real estate investing?' Once you know this, you can find a piece of property to match your needs and help you reach your goals.
When you find a property that meets your objectives and that has a stable cash flow to carry itself through good times and bad, buy it. Hold onto the property, covering your costs and funding your other investments with the money you make from the rent.
In Monopoly, the most desirable piece of land is Boardwalk. Sometimes people don't spend any money in Monopoly because they are saving it all for the chance to purchase Boardwalk. However this is a mistake- while you hold out for Boardwalk, other players who bought other properties early in the game are making steady income. If you wait for the perfect 'landing spot' or the perfect market, you'll find that it might be too late to get in the game.
It's not really about luck- not even in Monopoly. Luck plays a small role in all of our lives, but nothing is really THAT random. Just as you can make money in a downward moving market, you can lose money in an upward market.
The secret every real estate investor should know about timing the market is comprised of two parts. The first part is that now is always the best time to buy real estate IF, and here comes the second part, you can find properties that will carry themselves through bad times.
I haven't even mentioned the fact that current market conditions are great for real estate investors to find deals in. Interest rates are low, prices have come down, there is a ton of inventory on the market AND homes are very slow to sell. It's really the perfect time to buy but I am not really trying to convince you of that. I am just trying to convince you that, even if the property you buy today goes down in value tomorrow, you will still be successful as long as you buy one that brings in enough rent to cover it's costs. If you can find deals like this, NOW is ALWAYS the best time to buy. - 23199
I don't know what the market will do tomorrow. But what I've learned is that NOW is always the best time to buy if you find a good deal.
I learned about real estate early because I come from a family of real estate investors. Whenever there are big family events, we always play Monopoly quite competitively. It's not just a game to us; we do it to prove how good we are at investing in real estate.
Monopoly, the game, holds few similarities to real estate investing in the real world. But, the big secret to gaining a serious advantage in Monopoly is the same secret to winning in real life real estate investing, and it has everything to do with timing.
"Hold on," you say, "Didn't you just say you can't time the market?" While it's true that you can't time the market, and that real estate is about timing, just like in Monopoly you want to make sure you buy real estate early. That means you should buy real estate when you are as young as possible so it has a chance to increase in value. That's what I mean about timing and that's why you should never wait to buy real estate.
Everyone knows that in Monopoly the "The Objective of the Game is to Become the Wealthiest Player Through Buying, Renting and Selling Property". But if you simply roll your dice and hope for the best, then you're not playing the game of Monopoly, or life, up to your full potential. If you play this way, winning will always be a matter of luck, and it doesn't have to be.
So what are the rules of real estate investing in the real world? The first and most important rule is 'what do you hope to accomplish with real estate investing?' Once you know this, you can find a piece of property to match your needs and help you reach your goals.
When you find a property that meets your objectives and that has a stable cash flow to carry itself through good times and bad, buy it. Hold onto the property, covering your costs and funding your other investments with the money you make from the rent.
In Monopoly, the most desirable piece of land is Boardwalk. Sometimes people don't spend any money in Monopoly because they are saving it all for the chance to purchase Boardwalk. However this is a mistake- while you hold out for Boardwalk, other players who bought other properties early in the game are making steady income. If you wait for the perfect 'landing spot' or the perfect market, you'll find that it might be too late to get in the game.
It's not really about luck- not even in Monopoly. Luck plays a small role in all of our lives, but nothing is really THAT random. Just as you can make money in a downward moving market, you can lose money in an upward market.
The secret every real estate investor should know about timing the market is comprised of two parts. The first part is that now is always the best time to buy real estate IF, and here comes the second part, you can find properties that will carry themselves through bad times.
I haven't even mentioned the fact that current market conditions are great for real estate investors to find deals in. Interest rates are low, prices have come down, there is a ton of inventory on the market AND homes are very slow to sell. It's really the perfect time to buy but I am not really trying to convince you of that. I am just trying to convince you that, even if the property you buy today goes down in value tomorrow, you will still be successful as long as you buy one that brings in enough rent to cover it's costs. If you can find deals like this, NOW is ALWAYS the best time to buy. - 23199
About the Author:
Learn How to Retire with Investment Property with Julie's free Investment Property Starter Tips Guide. Learn how to create financial freedom, positive cashflow and massive wealth with tips like: How to find quality rental properties, finding and keeping great tenants, and easy ways to make more money with Investment Property.
posted by X - Men @ 5:09 AM
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