Long Term Real Estate Investing is like Pitching

The list of all that’s crucial to arriving at retirement with more than enough income is far longer than I knew, back when I was much younger and knew… pretty much everything.

So many factors must be infused into the ‘recipe’ that timing almost always becomes one of the most pivotal factors of all. Strategies executed late, or before their time, which is sometimes more injurious, can render the investor’s retirement results relatively disappointing. I’ve heard far too many times how ‘our retirement is not anywhere near what we thought it should be, and we have no idea where we went into the ditch’. When it comes to timing, the strategy most often mistimed is cash flow, when capital growth would be the preferred approach.

The debate over location quality not only pits those coveting higher cash flow against tenant quality, etc., but experienced against inexperienced investors. Not to say there aren’t those who’ve done exceptionally well in grossly subpar locations, cuz I know a few of ‘em. But it’s solid use of British understatement to say they’re a tiny minority of investors. Those who’ve tried that approach over the long haul have generally arrived at retirement wondering where they went wrong. Their cash on cash numbers were always higher than their buddies, yet when it counted most — in retirement — their buddies’ strategy of insisting on blue chip locations resulted in larger, far superior incomes when the retirement party’s last toast was uttered.

Remember: We can only spend after tax income. And even the pre-tax income is less, due to higher operating costs for poorly located, older property. Yeah, I know, Captain Obvious. Yet not so for far too many.

At the beginning of the …read more