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Letting Logic Lead

  • Writer: Kara Cortez
    Kara Cortez
  • Apr 29, 2024
  • 2 min read

Updated: Jun 23, 2024

This last week was stressful. At various points, my phone went swimming (and became nonoperational), both kids vomited, and one of them had a concussion. Add to the equation two parents working full time and you might understand our week. I mention this not to complain, though it is a good reminder of our why, the reason we are investing in real estate. I mention it because of the number of times Ken and I looked at each other and we’re like if only we already had our real estate empire established. I’m pretty sure I sat there and added up all of our possible sources of income for buying ALL the properties at least twice. But even if we could have afforded to buy another property or two, we should not have tried to do this in an already heightened emotional state. One of the things that I have learned  throughout our education is how important the numbers are to REI. You cannot let your emotions choose where, what, or when you buy. However much you might want a vacation house on the beach or however cute that two bedroom one bath cottage might be, does not mean that either is a good investment property (it doesn’t mean they aren’t either). It does mean that you should look at the numbers. How much will the property cost, how much will you put toward a down payment, will you pay extra to buy down the interest rate, what is the interest rate, how much rent can you expect to receive a month, how much will you need to spend on repairs, what is your expected vacancy rate? These are some of the questions you will need to be able to answer before buying a property. As gorgeous as a property is, if you’re going to be losing money monthly, you may want to look elsewhere. When people hear we bought a house in Canton, OH, I get a lot of confused stares. No, we don’t plan on moving there at any point. I am not familiar with the area, I have only been there the one time. We bought there because the cost of the property was low and we could afford the down payment. Canton is one of the markets where the real estate value has stayed relatively low but the rental market has gone up. As a result, now that we have a tenant officially moved in, we can expect to net cash-flow almost $400 a month. And that is just for the first year. As time passes and rent goes up, this investment should only improve in its earning potential. So while I have no particular ties to Canton, I am happy that we have bought property there. It was a huge mindshift to recognize that it was the numbers, not my emotional reaction to a house, that truly matters. And for this reason alone, I am glad we survived the week without making impulsive investment decisions.

 
 
 

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