You know it’s a real estate boom when every Monopoly fan becomes a real estate investor again!
A look at the real data shows an undeniable improvement in many local real estate markets but profitable real estate investing requires a winning strategy and recognizing that not every ‘deal’ is really a deal…
Rolling the Dice: Flaws in the Monopoly Strategy
One real estate ‘investor’ recently posted a blog on a prominent network describing how their winning Monopoly strategy should be applied to live real estate investing.
Monopoly is a great game and is a fun way to teach kids about investing and real estate but that doesn’t mean a good Monopoly player is a savvy investor.
This investor proclaimed that everyone should create their own Monopoly by using everything but their last $100 for buying up every single property they can get their hands on, going all out on building and mortgage everything when ends don’t meet.
Clearly, while exciting this has a serious flaw as a live real estate investing strategy. This type of tactic already has many far overpaying for empty rentals. Then what happens when unexpected expenses arise and the mortgage doesn’t get paid?
As investors we would all love for everyone in the world to flood the market and scoop up all of the homes we are flipping at premium prices but that doesn’t mean it is smart. Those bad dice rolls do happen and the “Chance” cards can wreak havoc. Going broke in real life isn’t nearly as fun as in the game.
This is a great time to invest in real estate, it can be done with very little money, mortgages can be good for leveraging but not every distressed property is a good buy and smart money management including building up savings is critical for long term success.
