Improving Our Communities Through Real Estate Investing

No eyesores on this street

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.

Creating Jobs

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

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15 Comments

  1. Posted March 5, 2012 at 1:52 am | Permalink

    Great way of looking at real estate investing. Of course that is the positive side. There is also the negative side of people investing in real estate and then leaving it empty as speculation buyers. I think it would be quite rewarding to be able to fix up an ugly house and make a positive impact on the community.
    Modest Money recently posted..Blooming Blog iPad2 Giveaway ContestMy Profile

    • Dollar D
      Posted March 5, 2012 at 9:42 am | Permalink

      I don’t think I’ve ever heard of this practice but it doesn’t sound very profitable! Glad you enjoyed the post. It’s very satisfying to see the house in it’s finished state and even more satisfying to sign a lease with an excited tenant.

  2. Posted March 5, 2012 at 10:18 am | Permalink

    I agree it is win win win win win win for all. Before we bought our house and started making repairs it was the ugliest house on the street with the oldest paint job and no shrubbery. Now we are slowly tackling these things over the past few years. And it is a 2 family unit so the top is rental…cha cha ching!
    christopher recently posted..The 3 C’s to Car BuyingMy Profile

    • Dollar D
      Posted March 5, 2012 at 10:20 am | Permalink

      I’ve heard a lot of great things about that strategy! Sounds like you’re doing well with it.

  3. Posted March 5, 2012 at 9:59 pm | Permalink

    I have tremendous respect for people who buy an ugly house and transform it into something beautiful. I always support business that go into not great neighborhoods and try to do something meaningful there. People like you change bad into good. Loved your post!
    Aloysa @ My Broken C recently posted..Reading Salon and February Blog UpdateMy Profile

    • Dollar D
      Posted March 6, 2012 at 8:35 am | Permalink

      Thanks, Aloysa! It’s a really satisfying feeling and I think that anybody could learn how if they had the right teacher. I know I wouldn’t be in this position if I didn’t get educated on investing!

  4. Posted March 5, 2012 at 11:34 pm | Permalink

    Great philosophy! Everybody win in this scenario.
    Many people likes to invest in other states where the cash flow is better, but I’d rather invest locally. We live in the area and need to invest in it.
    I don’t mind buying the ugliest house in a good neighborhood. It’s all about location, right?
    Joe @ Retire By 40 recently posted..Save Gas By Taking Public TransportationMy Profile

    • Dollar D
      Posted March 6, 2012 at 8:36 am | Permalink

      I would have a hard time investing out of state too but thankfully I live in a great market. An ugly house in an otherwise beautiful neighborhood can be a great opportunity!

  5. Posted March 6, 2012 at 8:37 am | Permalink

    Hey DD…

    as is now routine, I really enjoyed this post. It fits well with some stuff I’ve been pondering and I’ll be linking to it in an upcoming one of mine.

    The subject will be the value of charity v. other kinds of spending. That is let’s suppose you invest 20k in fixing up a house. That 20k generates all the many benefits you describe. Could you have done more good for the community by donating that 20K? hard to see how.

    I do believe in charity:

    http://jlcollinsnh.wordpress.com/2012/02/08/how-to-give-like-a-billionaire/

    but would I be doing more good by donating to a charity or to investing with someone like you?

    I don’t know the answers here, but it is an interesting question I think.
    jlcollinsnh recently posted..Armageddon and the value of practical skillsMy Profile

    • Dollar D
      Posted March 6, 2012 at 8:53 am | Permalink

      That’s definitely a tricky problem and I look forward to reading your post about it!

      I think the most generous thing you can donate is your time. After that comes money. 20k to the right charity could do a lot of good! But only to the right charity: one which is lean, with few overhead costs. In my case, I’m not really all that generous, as I wouldn’t be doing this if it weren’t profitable. But it’s awesome that I can create enough value through my actions that I can benefit a lot of other local people *and* make a profit.

      I loved that article you wrote about setting up foundations. That was actually kicking around in my head for a while. I imagine myself as an old philanthropist, donating my apartment complexes into a trust of some kind, where the cashflow goes towards a charity for years to come. Rather than a one-time gift of cash, I could give them the gift of cashflow!

      My plan all along has been to have so much money that I have to figure out how to spend it all before I die. I’m sure I’ll end up giving a lot of it away :)

  6. Posted March 6, 2012 at 11:43 pm | Permalink

    Buying the worst house in a nice neighborhood has been touted as an option with good potential for profit, and I believe it! Location, location, location – the most important words in real estate. If you have that, you can make things work.
    Tie the Money Knot recently posted..The Urge to Merge – Money After Marriage, That IsMy Profile

    • Dollar D
      Posted March 7, 2012 at 9:35 am | Permalink

      Absolutely. And it can be a lot of fun as well!

  7. Posted March 7, 2012 at 12:51 am | Permalink

    For the first time I have read a post on Real Estate that addresses the investor’s desire for social work. You have presented the idea in such a way that people will take pride in investing at such places. I am impressed at your effort.
    Get Rich Point recently posted..DOD can haunt you to the point of commiting suicideMy Profile

    • Dollar D
      Posted March 7, 2012 at 9:39 am | Permalink

      I think it’s important to realize the social impact of our investing efforts.
      Being motivated by the dollar signs can easily lead one to become a slum lord! Your tenants are people too and every landlord would do well to remember that. The only (sustainable) way to make money is to create value so that’s what we all should focus on.

  8. Posted March 8, 2012 at 11:11 pm | Permalink

    This is a very good way to think about rental investment.

    I have considered rental properties in areas where I would like to live down the line and I think it would instill a good sense of community by owning them. Ultimately I am just not ready to drop long-term roots yet.. :P
    Drew @ EpicFinances. recently posted..$240 Ipad? Yes Please.My Profile

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