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Abstract

I bought my first property while I was still a student, making only $30,000 per year. I needed downpayment assistance to purchase the house. It was a stretch every month but I learned a lot and I’m glad I did it.Here’s what you learn buying investment real estate before you can afford it:If You Can Get Used to the Responsibility, You WinFear stops most people from investing in income producing real estate. They are afraid of having angry tenants and leaky faucets. The best way to face a fear is to face it head on.Instead of listening to people who are not property owners, a better idea is to learn how “bad” the disadvantages are for yourself. You’ll quickly find out if you like being a property owner and can make an informed decision to continue to invest or not.You Learn How to Make Money While You SleepMaking money while you sleep is arguably one of the best skills you can develop — and the sooner the better. It decouples your effort from the amount of money that you can make. Income property is one of the best ways to make money while you sleep because the business model is proven is the most historically proven asset class.You don’t actually need a new business model or reinvent the wheel, in order to make passive income.That is what makes income property brilliant. By owning income producing real estate you learn to make money while you sleep, even before you can afford it. The fact of the property earns income helps support its own expenses.Even If It’s Not The Best Investment, It Gets You In The GameYou tend to pay attention more when you have something at stake. Even if

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your first investment property is not the absolute most lucrative move, it gets you in the game and increases your awareness. I personally pay more attention to investment opportunities when I have money on the line. I can be interested in a potential opportunity but unless I put even $1 in it, I’m not going to go out of my way to actively monitor it.And the same thing is true in real estate. After the first property, you’ll learn first hand what makes a profitable investment, what levers you need to be cognizant of, and what will allow your dollars to go further and produce greater and greater returns.By actively investing, you learn how to optimize your expenses in property management and repairs and how to be a responsible steward of the opportunity.Being an owner will transform you from a passive observer into a proactive participant.Ownership is HumblingLandlording can have negative connotations about taking advantage of the less fortunate. That could not be further from the truth. In reality, landlords are some of the few segments that proactively cater to this population. Owning income property means you to be a direct servant of those people who do not or who otherwise cannot afford a property of their own. Each month a property owner must recognize and honor the money that someone pays and provide them quality housing in return. The transaction bestows something akin to a fiduciary responsibility on the property owner because they are in the position of control. It is imperative that the residents receive value for the money that they’re spending.Being a property owner has been both one of the most humbling experiences and one of my greatest joys.</article></body>

I Bought Real Estate Before I Could Afford It

Here’s what I learned

The experience was both humbling and rewarding

Real estate investing is notoriously expensive. It requires lots of capital and if you purchase the wrong property it can become a money pit.

It’s one of the more elusive asset classes because it has so many moving parts. It’s simple to understand. Buy something, rent it out, make money. But the how of doing all those things scares a lot of people away.

At the same time, real estate is the most historically proven asset class. When you look at the wealthiest people in the world, many of their fortunes were made possible by substantial real estate holdings.

“Don’t wait to buy real estate. Buy real estate and wait!” — Will Rogers

The thing about real estate is that it an asset class that benefits you in multiple ways. Of course you make money each month in the form of rent. You also earn capital gains as the property appreciates and it even has unique tax advantages that other investment vehicles don’t offer. This equates to an incredibly efficient income generator that steadily increases in value.

But…what if you can’t afford to buy property?

Figuring out how to buy the first investment property is something a lot of people struggle with. I bought my first property while I was still a student, making only $30,000 per year. I needed downpayment assistance to purchase the house. It was a stretch every month but I learned a lot and I’m glad I did it.

Here’s what you learn buying investment real estate before you can afford it:

If You Can Get Used to the Responsibility, You Win

Fear stops most people from investing in income producing real estate. They are afraid of having angry tenants and leaky faucets. The best way to face a fear is to face it head on.

Instead of listening to people who are not property owners, a better idea is to learn how “bad” the disadvantages are for yourself. You’ll quickly find out if you like being a property owner and can make an informed decision to continue to invest or not.

You Learn How to Make Money While You Sleep

Making money while you sleep is arguably one of the best skills you can develop — and the sooner the better. It decouples your effort from the amount of money that you can make. Income property is one of the best ways to make money while you sleep because the business model is proven is the most historically proven asset class.

You don’t actually need a new business model or reinvent the wheel, in order to make passive income.

That is what makes income property brilliant. By owning income producing real estate you learn to make money while you sleep, even before you can afford it. The fact of the property earns income helps support its own expenses.

Even If It’s Not The Best Investment, It Gets You In The Game

You tend to pay attention more when you have something at stake. Even if your first investment property is not the absolute most lucrative move, it gets you in the game and increases your awareness. I personally pay more attention to investment opportunities when I have money on the line. I can be interested in a potential opportunity but unless I put even $1 in it, I’m not going to go out of my way to actively monitor it.

And the same thing is true in real estate. After the first property, you’ll learn first hand what makes a profitable investment, what levers you need to be cognizant of, and what will allow your dollars to go further and produce greater and greater returns.

By actively investing, you learn how to optimize your expenses in property management and repairs and how to be a responsible steward of the opportunity.Being an owner will transform you from a passive observer into a proactive participant.

Ownership is Humbling

Landlording can have negative connotations about taking advantage of the less fortunate. That could not be further from the truth. In reality, landlords are some of the few segments that proactively cater to this population. Owning income property means you to be a direct servant of those people who do not or who otherwise cannot afford a property of their own. Each month a property owner must recognize and honor the money that someone pays and provide them quality housing in return. The transaction bestows something akin to a fiduciary responsibility on the property owner because they are in the position of control. It is imperative that the residents receive value for the money that they’re spending.

Being a property owner has been both one of the most humbling experiences and one of my greatest joys.