Recently someone emailed me from my real estate web page serving the London Ontario Canada real estate market asking for advice regarding the purchase of there first real estate investment. The next morning when I was practicing some yoga it occurred to me that successful real estate investing is very much like yoga. Both are very simple in execution and theory; however both require discipline, consistency and perseverance.
In yoga you take a relatively simple position and hold it for a long period of time to derive benefit. Likely at this point you see where I’m going with this analogy. Yes indeed real estate is quite the same. You take a position which is buying a property and hold onto that position for a sufficient period of time to derive a benefit. Sounds simple indeed! However, if you’ve tried yoga you know that it can be one of the most challenging workouts one can do. In real estate investing one can be challenged by, raising interest rates, bad tenants, vacancies, maintenance issues and perhaps most significant changing personal circumstances. You need to hold on to your position to derive a planned for or significant benefit, which in this case is significant appreciation of the property.
To derive a benefit from yoga one must have certain rules that have to be consistently followed. For example, one must plan for specific times per day or week to set aside for yoga practice. Other rules might be not to be overly fatigued, inebriated etc. for these time periods. For real estate investing setting goals is a separate issue from setting rules. In my opinion it is extremely important to do significant research so that one can realistically set certain rules as these rules will protect you from impulse buying and poor buying practices in general the least of which is one’s own greed or ambition. For example, many years ago prior to being a realtor I bought houses close to the University of Western Ontario Canada and fixed them up to rent to students. So here are my rules from this time period.
1. Identify certain geographic area based on travel time to the main campus.
2. Know market rents for this geographic area
3. Be very conversant with market value of properties in this geographic area and know cost of capital improvements if any for all the work required prior to purchase
4. Ignore other geographic areas
This went extremely well for me, until I broke one of my own rules and purchased a house outside the geographic area. I’d like to blame this on a fast talking real estate agent; however it was my greed/ambition that truly was to blame. The main point here is one needs a set of rules or guidelines specific to his/her investment goals, geographic area and capabilities and stick to them. The above rules may not be applicable to your situation but are for illustrative purposes. After all everyone should have their own rules to live by (lol) In regards to investing in real estate or Yoga I hope the above may provoke some thought and provide some guidance.
Jim Straughan is a real estate sales representative and webmaster from London Ontario Canada. You can google Jim’s website http://www.straughan.ca with the fallowing keywords: London Ontario Jim. For more thoughts on real estate investing of a more conventional nature check out http://www.straughan.ca/Investing_Theory/page_1128501.html