Making Long-term Investing Pay Off In The Short Term
One of the things that I often encounter when I am dealing with long-term real estate investors is the notion of getting by
. This might come as a surprise to you. After all, people who are investing in multiple properties with an eye for the long haul shouldnt be struggling, right? Arent they the ones who have all their finances in order and are ready to pounce the second they see a good deal or a method of wealth generation that looks right for them? You would think so and these things should all be true but often, in reality, these long-term investors are stressed, worn out and, if you asked them, would tell you that they barely are scraping by.At first, you might be tempted to dismiss this as a product of the stress of managing large amounts of money or multiple properties. However, it is, in fact, a result of something far more simple:
A misconception about how long-term investing is supposed to work.
Most people, including experienced real estate investors, have the notion that in order to make money in the long run, you have to give something up in the short term. That you cannot have huge financial gain without financial sacrifice. Of course, to some extent, this may be true. For example, if you have 1000 dollars tied up in a mortgage each month and someone comes along and wants to borrow 120,000 dollars from you at a great interest rate, but loaning them that money means you might not have the mortgage payment, then you may have to give up the interest on that loan in order to keep your existing investments secure. Or on the other hand, if you can flip a house and make 10,000 dollars on the contract, or buy it and pay 700 dollars a month on the mortgage to keep it in the long term, then in the short term you could be viewed as losing 10 grand. However, as we all know, its not really quite that simple. At the end of the period of time that you own the property, you will likely sell it for a net of far more than 10,000 dollars. So there are a lot of things to factor in.
Unfortunately, these issues have led to investors thinking that it is not possible to generate serious money in the short term using long term investments. In reality, nothing could be farther from the truth. As the owner of a property, it is your job to make it profitable as well as keeping it in the black. After all, the more profitable it is, the more it will be worth. Get good tenants, and do things to increase the rent you can ask far above what you are paying. These things might be customizations or simple, inexpensive services that help you keep an eye on the property, such as a basic landscaping service or maid presence once a month. They could also be things like buying properties in areas with great public schools, or near in-demand public facilities like libraries or safe, well-kept public parks.
Whatever you do, do not fall into the trap of thinking that your long-term investment property will be a drain on you for the next 30 years. Instead, focus on ways to make it generate not only enough money to keep itself up, but enough money for you to start creating wealth with it long before you opt to cash it in.
Peter Vekselman has been successfully investing in real estate since 1996. He has completed over 1200 real estate deals, owned a construction company, been a private lender, and owned a property management company. Peter currently works with clients all over the US helping them achieve riches in real estate investing. For more information please visit www.CoachingByPeter.com
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