Money Rules for Real Estate Investors

If you\'re going to invest as an investor, you need to play with investor money rules. It\'s the same in any kind of sport. You need to know the game you\'re playing to know what rules to follow.

The game of hockey has specific rules. If you want to play hockey, you need to know what the rules are and be willing to play the game by these rules. Can you imagine what would happen if you tried to play hockey with tennis rules? It wouldn't be hockey and it wouldn't be tennis. It's the same in real estate. You can buy real estate with consumer rules and you can buy real estate with investor rules. What happens when you attempt to invest in real estate with consumer real estate rules? Often, you will end up with a result you don't want.

Are there really consumer money rules for real estate? The most important rule is that you have to qualify to buy the real estate. This means that the most important considerations are whether you can pay for the real estate with your own money and whether you can qualify for credit. As a consumer, you will need great credit and enough money down payment. For a consumer real estate purchase, it is first of all about you.

These consumer rules often make it difficult when you want to buy property as an investor rather than a consumer. They can keep you from making money as a real estate investor. Often this is the reason why investors are unsuccessful when they attempt to invest in real estate. They think that they have to follow consumer rules when they invest in real estate. Instead of buying as an investor, they attempt to buy the same way they buy their own homes.

Why is this such a problem? When people try to buy investment property using consumer money rules, most people cannot even get started. They can't pay the down payment or they don't have enough credit. In an expensive market, many people can't even get into the game to buy their own homes. When the market is very expensive, it is very difficult to charge enough rent to pay the mortgage.

Even with these limitations, people do build real estate portfolios following consumer rules. The problem with this method is that it all depends on your money and your credit. You can create wealth this way, but it is a long and hard road to financial freedom.

Investors live in a world that is different than the world of consumers. Even though we\'re all living here on the same planet together, investors think differently. They know that there are different rules of money.

The first rule of successful real estate investing is to invest with investor rules rather than consumer rules. As a consumer, it\'s all about you. As an investor, it\'s about the property and the deal. The focus is taken away from you, your money, and your credit and directed to whether or not the deal makes sense. This is very good news for people who want to invest in real estate. You don\'t have to have a lot of money or excellent credit to invest. You do need to know the investor money rules.

By: Kalinda Rose Stevenson Ph.D.