One thing I love about real estate investing is that you get to own something tangible, something physical. When you buy a share of stock, you’re buying a piece of a company. But when you buy a rental property, you’re buying a piece of a community.
Additionally, the average real estate transaction involves dozens of people and companies in many different areas. And that’s just to buy the place! After that you’ll need to renovate, find a tenant, and manage the property. You have to deal with all kinds of people.
Since you are dealing with real property and real people, it also means that you can make a real impact in your community. There’s no off-shoring here. You are providing both employment and value to local people and making a profit at the same time. That’s the essence of true capital: earning money by providing value for others!
Beautifying the Neighborhood
When we invest in a neighborhood, we buy the ugliest house on the block and transform it into one of the nicest. That’s because the ugliest houses end up being the most profitable! In fact, when a house gets ugly enough, due to neglect or vandalism, you can be damn sure that your average home buyer is not going to want to touch it.
Only an investor would want a house that ugly and that means investors are actually an important part of the housing market. By buying that house no one else wants and transforming into a beautiful home, we make the whole street look better and boosts property values in the long run.
Real estate investing, like many businesses, requires expertise in a lot of areas: locating and evaluating deals, renovation and maintenance, leasing and management.
But no matter how skilled you are, there will come a point where you will need to consult an expert or require the services of a vendor of some kind. You can try to do it all yourself but you will make more money in the end if put together a team: insurance agents, real estate agents, lenders, inspectors, plumbers, roofers, electricians, painters, carpenters, and other contractors.
By building relationships with vendors, you leverage other people’s time and expertise for your mutual benefit. And all of this business activity puts money into your local economy and creates jobs in your community.
Providing Quality Housing
Lastly, I believe that providing a quality product is the key to a successful business. Our product is housing and we make it our mission to provide clean, functional and affordable housing to working class families.
My wife and I always joke that when we are done fixing up a house, it always ends up being nicer than our house! And why shouldn’t it be? Everyone needs a place to live and I firmly believe that we are making a difference, albeit a small one, by providing houses that people love to live in.
Invest in Your Own Backyard
When you invest in real estate, you’re investing in your own community. You’re cleaning up neighborhoods, employing local people and providing quality houses to other members of the community. That just gives me the “warm and fuzzies” if you’ll pardon the expression.
And on top of all that, you’re making a profit! It’s a win-win-win-win for everyone: the city, the business community, the tenants and you!
Photo by Lauren Wellicome