The classic game of Monopoly can teach us a?lot about buying real estate in Columbia, MO.? When you really consider the principals you use to win the board game, it makes sense that the same strategy in real life will help you with your real estate investments in Columbia. Below are 5 rules that you should follow and take the advice of Monopoly:
Rule 1 ? Always have CASH
This is the most important rule! The winner of Monopoly is the last player with money.? In order to be the last player with money, you have to buy smart.? If you bought something on the board every chance you got, you would quickly realize that you couldn?t afford to pay your mortgages and you would run out of money and lose.
This same exact principle applies to buying property in Columbia, MO. ?If you aren?t patient and just start buying because you think the property is cheap, you will quickly run out of money and lose!? The key to buying property in Columbia, MO is cash?.if you have the cash, you can take advantage of the other players who bought when they shouldn?t have.? They will be forced to sell for a discount or end up in foreclosure.? Either way, the investor with the cash will be there to buy at a great price!
Rule 2 ? Be Patient
To win at Monopoly you have to be patient and have a game plan. You just can?t win by buying every piece of real estate you land on. As stated above, if you just start buying property, you will find yourself out of money.
Similarly, if you just start buying property in Columbia, you will find yourself the loser of the game.? Patience is a virtue.? Waiting on the sidelines until the time is right is crucial to building a successful portfolio of real estate.? A good real estate investor knows when to buy and when to pass.
But don?t wait too long.? I recently started watching two properties that I considered great buys.? I was too patient!? There are others out there that also noticed they were good buys and before I could act, the properties were gone.? If the numbers work and you have the cash to make it happen?.don?t hesitate!
Rule 3 ? Cash Flow is King
Monopoly is a simple game: you start off with some money and your goal is to be the last player standing with money. The way you win in Monopoly is by collecting rents on property, or cash flow.
Buying rental property in Columbia, MO is exactly like Monopoly in this regard. Over time, the value of your rental property will increase in value based the cash flows they produce. We all know that as time passes things get more expensive, including rent!? So take advantage of the prices today and buy real estate.? As long as you maintain your property, your rents will continue to increase and so will your cash flow.
Rule 4 ? Don?t buy the most expensive piece of real estate
Most monopoly players want to own Park Place and Boardwalk since they have the biggest payouts. But they are also the most expensive pieces to maintain. Many people think that the big pay out will help them win?..WRONG.
Just like in real world property buying, if you can buy 3 homes with the same down payment cash as one expensive home, odds are you are going to make more money on the 3 homes.? I see this every day from investors, they want a fancy rental house that costs a lot of money.? Sure they can rent it and it might pay for itself.? But why do we do this?? The answer is simple?.we buy rental property to make money!? I can show most investors that if they took their down payment money and spread it out over a couple properties, their return on investment would be greater.? So remember, the most expensive piece of property is not always the best investment!
Rule 5 ? Don?t buy all of your properties in the same area
You will never win at Monopoly buy just buying one property and building a lot of hotels on it. ?Chances are if you own multiple properties around the board, other players will end up paying you more often. By spreading your investments out over the board, you have the ability to gather more rents.
The same is true when buying rental property in Columbia, MO. If you focus on buying all of your properties in one neighborhood or one price, you limit the number of rentals that you can provide for.? Some people want to live in different parts of town.? Some can only afford less rent.? Make sure your investment portfolio contains all types of properties.? There is always a renter if the property is available.
Conclusion
The rules of Monopoly can help you with your investments in Columbia, MO.? Just remember to be patient, focus on cash flow, keep cash on hand, and buy properties in all parts of town.? If you follow these 5 rules, your investment strategy should improve.
I enjoy working with investors in Columbia, MO.? So give me a call if you have questions or want to start investing!
Don Seitz
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