Over the years I have heard a lot of excuses why people don’t invest in real estate. Let’s look at a few of these and see if we can’t come up with some ways to solve them:
I am too busy: We are all busy. People that are already investing in real estate are no more or less busy than everybody else.
Property management scares me: My advice would be to spend the time and energy up front to investigate your potential tenants before letting them into your property. There are some good books out there on how to be a better manager. You can always get a property manager to handle the day to day as well. Just factor that into the operating costs of the property that you are going to be buying to make sure the building still cash flows properly even with these extra costs.
I am too old: There is a Proverb that says, “The best time to plant a tree was twenty years ago. The second best time is today.” While it is true that the older you are the less time works in your favor, owning property is never a bad thing. Also, typically, people in their fifties and early sixties have more money saved up and make a higher wage which allows them to buy more properties and pay down mortgages quicker. Managing your own properties in retirement will bring in some extra monthly cash flow. Focus more on cash flow than the long term appreciation. Try to buy properties that have the really big cash-on-cash return or put down a larger down payment.
I don’t live in a big city: If you live in a rural area and you don’t think that there are many rental opportunities close by, almost all of us will live within two to three hours of a larger center. You don’t have to live right next to your properties. In fact, in a future blog I will give some tips on how to invest in a different geographical location.
I don’t know enough to invest: Read more books, get a mentor (hint, hint, nudge, nudge), or join an investment group. This one is definitely not a valid excuse.
I am scared of being in debt: There is good debt (debt that lets you buy assets that appreciate; like real estate or retirement savings plans) and bad debt (debt that lets you buy assets that depreciate; like a boat or snowmobile). If you want to sleep better at night put a larger down payment on your properties. This will keep your mortgage payments lower, which will give you larger monthly cash flow.
I don’t have any money: There are many practical ways to solve this problem, (Hey, I know of a really good book on money management in real estate investing. Contact me for a free pdf version). After that try to get some experience and then find a joint venture money partner. Get as much hands on experience as you can first, though.
You see. There are no excuses. The trick is to just go out and do it. If you would like to sit down and discuss a future that involves real estate investing please feel free to contact me.
