I grew up in a small farming town in Alberta, Canada. For 17 years, I was surrounded by farmers – and I never met a single one who’d even consider eating his seeds instead of planting them. They just wouldn’t do it. Neither would they harvest a crop early.
Yet that’s what many real estate investors do when they spend every penny their rental properties make, or when they sell as soon as a property has appreciated to just a fraction of its potential.
Sure, they’re better off than if they had never invested in those properties to begin with. But they’ll never get rich that way.
Instead of spending every penny a property makes for you, save it. Instead of selling as soon as a property has some equity in it, use that equity – and the money it made for you – to buy another property. That’s how you maximize your profits. If it’s making you money, let it keep making you money.
In his bestselling book Automatic Wealth, Michael Masterson says: “Here’s a promise: If you haven’t ever invested in real estate but you start this year, you’ll be glad you did. If you keep investing – buying at least one new property a year (which will be easy once you get going) – you will be a real estate multimillionaire when you retire.” Of course, Michael cautions that you don’t want to buy just any real estate. You have to do your homework and “buy right.”
Invest in real estate the way a farmer invests in his land. Plant your seeds. Let them grow. Keep an eye on them, giving them a bit of water and fertilizer here and there and doing some pest control. Then – when the “season” is ending in that market area or you’ve got a dozen houses that are making you rich – reap your rewards.[Ed. Note: For more insider strategies for getting started as a real estate investor, sign up for real estate expert Julie Broad’s free monthly newsletter. Get your free report for making money with real estate here.
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