Real Estate: A Game We Can Win

Ninety percent of millionaires have made some or all of their wealth through real estate investing. Fortunately, real estate is not limited to the wealthy. Instead, it is a powerful tool anyone can use to achieve financial freedom. To put it simply, real estate investing is a game we can win, and if we play the game smart, we can win big.

In this article, we will examine the key characteristics of real estate that make it a game we can win.

"Location, location, location"; every property you look at is bound to a specific location. And that is excellent news for us as investors. Because real estate is so local, not every investor has the same information about each property. For example, one real estate investor may live out of state and view information about a specific property online. That investor does not have the same information as an investor who lives nearby and can inspect the property in person before submitting an offer. Likewise, a third investor may have grown up in the same neighborhood as the property and heard firsthand that the property was going up for sale before being listed on the MLS. Each of these hypothetical investors has a different level of information about the property. The investor with the most knowledge may see deals where others do not or may be able to avoid disasters others do not see.

An inefficient market is an environment in which players do not all have the same information, costs, or emotions regarding a deal. Because of these differences, the price of an asset does not always reflect its actual value. Price discrepancies like this create opportunities for bargains, and it's great news for us as investors.

Location is a barrier to entry that prevents many people from playing the game in your area. Rather than competing with everyone in the country to submit an offer on a property in your neighborhood, you usually only compete with people familiar with that area.

The locality aspect of real estate is perhaps the single most influential factor that makes it a game worth playing.

Occasionally you may hear of someone who has come up with a brand new plan for how to make money with real estate. Sadly, more often than not, people's attempts to be clever with real estate leave them in undesirable positions owing more than a property is worth or finding themselves unable to make their monthly payments.

Don't be creative with real estate. Instead, be strategic and do research. Real estate is an industry where research wins. The difference between a gamble and an investment is that you can research an investment. If you neglect to do your homework when evaluating a property, you could end up in more trouble than just being sent to the principal's office.

The research we can do on potential investment properties makes real estate investing a safe and effective way to build wealth.

Finding the perfect investment property requires a lot of time and effort. It can take months of diligent watching and waiting before the right opportunity presents itself. And during that time, it may feel like nothing is happening. Waiting is where a lot of people get discouraged and decide to quit.

While searching for the right property can be a frustrating experience, it can also be a good thing for an investor who is patient and persistent. The high search costs act as a barrier to entry for new investors and help to prevent the market from becoming oversaturated with people making offers. In a way, the high search costs and slow transaction times benefit motivated investors and weed out the competition.

An experienced investor understands that it may take a while to find the right property, and that's alright. If you're going to be successful, you will need to be ok with working for free. Not everything you do is always going to lead to a big paycheck. You will spend a lot of time looking at properties you will never buy.

Emotions play a huge role in real estate transactions. For many people, a home is the largest purchase they will make in their lives, and dealing with transactions worth hundreds of thousands of dollars can be daunting.

Many people shy away from real estate because it feels foreign, scary, or overwhelming. They may think they don't know enough to be successful or worry they might lose their money on a bad investment. Other people find a property they love, become emotionally attached to it, and pay more than it is worth, simply because their emotions wouldn't let them walk away.

Learning to control your emotions and look at properties objectively is a critical skill for an investor. Real estate is not for the faint of heart. It is an exciting, fast-paced game that will tug at your emotions. If you play the game long enough, you will experience numerous emotional situations. Some will make you want to cry; some will make you angry, and some will make you shout for joy.

Those who face their fears, learn all they can, and then take strategic action often succeed.

Real estate investing is not as complicated as it may seem. There is a lot to learn before you buy your first property. But in the end, all there is to it, is to do it. Put in the work to become an expert on your local real estate market, do thorough research on every property you consider buying, and take a step back to look at the opportunity objectively and ensure you aren't making a rash or emotional decision. Doing these simple things will help ensure you are successful.

Perhaps most importantly, you need to believe you can win. And you can.