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One of the main pieces of advice I give people is to not fall in love with real estate, and instead focus on return on investment. The reason why I have to constantly repeat this mantra is because it’s really easy to fall into this trap! In fact, it just happened to me this weekend. I almost abandoned my entire real estate philosophy!
On this episode of Investing in Real Estate, I’m sharing my story of almost purchasing a vacation rental in Maine. I’ll discuss how I got an idyllic notion in my head, and how I came back down to reality. This is a tale that all investors need to be reminded of; don’t miss episode 222 of Investing in Real Estate!
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This weekend Natali and I celebrated our anniversary in Maine, and I fell in love with the beautiful homes in the harbor towns. I thought about purchasing a huge, expensive home and renting it out as a vacation rental. I imagined taking my family there on the weekends.
I even asked locals about the area, and got in contact with a realtor. But when Natali and I sat down and crunched the numbers, I realized how foolish I was being. A property like that, even if it was consistently rented throughout the year would only produce around 3% ROI.
At that rate, why even invest in real estate? I might as well be a stock market investor for those kinds of returns. Not to mention, with all the money I would use for just a down payment on a rental in Maine, I could scoop up multiple low cost properties in the Midwest.
At the end of the day, this was a stupid idea! I let the idea of sitting by a fire in Maine writing a novel, watching the lobster boats come into the harbor get the best of me. I was violating my core philosophy because the numbers didn’t make sense!
If you’re ready to begin building a passive income through rental real estate, book a FREE call with our team today. We’re ready to talk about your goals and want to help you learn more about earning legacy wealth for you and your family.
On this episode you’ll learn:
- What kind of ROI should you shoot for on a real estate investment?
- How can you set your emotions aside from the numbers?
- What is a typical vacancy rate for a vacation home?
- How do you calculate ROI?
- And much more!