It’s All About The Numbers!
Updated: Aug 14, 2020
Apparently not all of the real estate investors have the same mentality, experience, knowledge and understanding of the business.
What differentiate between most of them is the attitude towards investing in properties.
My experience in this business shows me that some of them are more emotionally attached to the properties than others.
For example, when it comes to buying single family homes, investors tend to look at them as if they are going to be owner occupied. They seems to care too much about the color of the carpets, the size of the backyard, the type of kitchen’s countertop etc. rather than focusing on the numbers which are way more important.
What I mean by “numbers” is actually real estate terms like: Comparative Market Analysis (Comps), Net Operating Income (NOI), Cap Rate, Return On Investment (ROI).
Off course, the locations of the property is very crucial for the investment, but even then if the numbers are not competitive enough then what is the purpose of of investing in that property?
At the end of the day, if you’re not planning to live in the property you’re buying then why should you care about the color of the bathroom tiles?
Shouldn’t you care more about what would be the yield on your money?
When investing in real estate one should compare the ROI to other areas, locations and properties.
On another note, when people are emotionally attached to properties, then they tend to make a lot of mistakes that could cost a lot of time, money and efforts.
If you buy a property just because you like the beautiful oak tree in the front of the house but o