Treat your first home as a financial investment
Gentrifanatics!
Thank you for being here with me once again!
Buying your first home is a big deal.
Some of you may have already made this leap. Don’t worry, what you’ll learn in this post applys to buying your next home too!
What I didn’t realize when I bought my first home is that every home you buy should be viewed the same.
Remove emotion from the equation.
Buying my first home was such an ordeal. So many emotions were running through my mind.
When people come over will they judge me based on the house?
Is this place comfortable enough?
Will I die in this house?
…okay maybe I went down a rabbit hole but hey, that’s me.
Now I’m not just some cold hearted guy (for the most part). Emotions do play into my decisions, I am (partly) human.
But through investing I’ve come to realize that a house is just that. Nothing more.
People make it comfortable or cold. I’ve seen some sad mansions and some happy shacks!
When it comes to using money to buy something you have to check your emotions at the door if you want to be financially successful.
If financial success isn’t your goal then that’s cool.
Buy that McMansion at an overinflated price in a cookie cutter neighborhood because all your coworkers will be jealous.
In this post you’ll learn three tips to help you buy your first or fifth house in a way that sets you up for financial success.
1. Treat It As An Investment
If you fall in love with a house be very cautious!
Seriously, how many times have you fell in love with something at the store? A week later you don’t know or care where it is right?
Houses are things.
Granted, houses are important things you need…shelters.
Think of it as food, another need.
You love that slice of pizza but you should be eating that quinoa.
Over the long term if you eat more pizza then quinoa then you’re pretty messed up in the game!
A home is a long term investment. If you get the pizza home instead of the quinoa home you’re losing!
Treat each house purchase as running a business. What do the numbers look like? Are you in the red or in the black? Losing or winning?
Who cares if it’s your dream house! If you bought a bad investment you’re gonna be broke when you wake up!
2. Make Sure You Have Good Exit Strategies
Face it, younger people move way more than our parents. We can’t sit still.
When you buy your house don’t think of it as your forever home. Think of ways that you can get out of that home and come out on top.
Any of these factors can make it hard to sell your house when life happens:
- Bad location
- Overpaid for the house
- Sub standard home owners association (HOA)
- Near anything that’s too noisy
- Crappy schools
- Weirdly built
- Weird lot
- Etc…
Related Post:
6 Critical Things You Must Look For In An Investment Property To Maximimize Your Profits
In 2008 too many people realized that they had overpaid for their house. When the market crashed they had no exit strategy.
As we discussed in previous posts you should use the 1% (or 2%) rule when buying.
That is, if you had to rent your house to someone then the rent would be 1% of the purchase price (100k price rents for 1k per month).
This simple rule, or as close as you can get to it, will ensure that you don’t overpay.
Be advised: finding these deals are hard work!
3. Use Creative Methods When Buying
If you do what everyone else does you’ll get what everyone else gets.
Everyone uses realtors.
This is not to say realtors are bad but they are in the business of making money through the buying and selling of real estate.
The higher the price the more they’re paid.
There are some great realtors out there that will help you achieve your goals.
When you find a good realtor treat them like gold!
Be clear on what your goals are, stick to them, and if you use a realtor make sure they stick to your goals.
Here are some options to get houses without realtors
- direct mail
- meet ups
- property managers
- banks
- meet ups
- property managers
- banks
Feel free to reach out to me and I can go into depth on how to use these strategies to get a great deal!
In Closing
Don’t fall into the old cliches of using traditional methods to achieve the American Dream
Related Post:
Follow your own dreams, don’t follow the crowd!
Using these methods to buy your first house will put you light years ahead of most home buyers out there.
Knowledge is power!
Even if you only use a few of these methods and tips the next time you buy you’ll come out ahead.
There is always another way to do something. Many times the popular way isn’t the best way!
I’m always more than happy to talk it through with you…
Just HMU, I’ll be around!
