What Real Estate Investors Know About Money
by Kalinda Rose Stevenson Ph.D.
Real estate investing is similar to any other sport. It has distinct rules. Some of these rules concern money. Real investing has distinct money rules. If you are going to invest, you will need to know what the money rules are, so that you will know how to play the real estate investing game.
If you\'re going to play hockey, you need to play by hockey\'s rules. If you\'re going to play tennis, you need to play by tennis\' rules. If you\'re trying to play hockey with tennis rules, you\'re not going to have a very successful hockey game. That\'s what often happens when people start to invest in real estate. They try to play this game called real estate investing with consumer rules. They mix apples and oranges, and end up with lemons.
Are there really consumer money rules for real estate? The most important rule is that you have to qualify to buy the real estate. This means that the most important considerations are whether you can pay for the real estate with your own money and whether you can qualify for credit. As a consumer, you will need great credit and enough money down payment. For a consumer real estate purchase, it is first of all about you.
Those consumer money rules often get in the way when you want to become a real estate investor. When people think they have to invest in real estate the same way they invest in their own personal property, they create obstacles to their investing success.
Why is this such a problem? When people try to buy investment property using consumer money rules, most people cannot even get started. They can't pay the down payment or they don't have enough credit. In an expensive market, many people can't even get into the game to buy their own homes. When the market is very expensive, it is very difficult to charge enough rent to pay the mortgage.
Despite these problems, people can and do buy investment properties as consumers. They use their own money and they own credit. As a way to build wealth, this is a long and hard way to create financial freedom. You have to use your own money and credit, which means that your money and credit determine the number of investment properties you can buy.
It's an interesting reality. We all live on the same planet together, but consumers and investors think different about money. The most successful real estate investors know that there is a different game with a different set of rules. Investors play the real estate game with a different set of money rules.
This means that the first money rule of a successful real estate investor is to invest with investor money rules. When you buy property as a consumer, the focus is on you and your money. When you buy property as an investor, the focus is on the deal itself. It's not about you. It's about whether the deal makes sense. This means that you don't necessarily have to have a lot of money or excellent credit to invest in real estate. You do need to know the difference between consumer rules and investor rules. This is very good news for people who want to invest in real estate, but don't have much money or great credit.
Want to learn what investors know about money rules? You will know when you read a
real estate investing book about the world's most popular board game. You can become a
No Money Limits investor. You can get a
unique content version of this article.
