49) Playing the Long Game & Section 8 Pros and Cons

House Money Weekly

In this week’s House Money Weekly segment, there will be a twist because the blog post that the hosts will discuss is written by the guest host, Eric Hughes. They discuss guest blog 1, Playing the Long Game with Rental Properties. Eric's blog is very analytical and detailed, which is completely different from Alan’s HMM blog. Eric even edited Alan’s book "House Fire". Key Idea #1 is that your returns increase over time which is one of the nice things about rental property investing. Cash flow increases over time. Key Idea #2 is that short term is hard to predict while long term is easy to predict. This key idea ties into statistics and math. In real estate, you can have a really good year with your property while in the next year have a really bad year where you lose a lot of money. Eric also explained that the more properties you have and the longer you hold them, the more predictable your results will be. Alan calls this the "mutual fund approach" to real estate. Key Idea #3 is that time in market beats timing the market which is to get in now and just wait and let the market do its thing. Key Idea #4 is to keep it simple. Real estate is a place of different investments, ideas, strategies and methods. For an average person, it can be difficult because there's so many different ways and ideas in the real estate world and the simplest possible way is to just buy a house, hold it for a long time and manage it professionally. Eric’s advice is the simple boring way is the best way. Key Idea #5 is to be ready to ride out the storm. If you own rental properties and you own them for a long enough time, everything you can imagine that's bad will eventually happen and you must be ready for that. Key Idea #6 is for a smoother ride, scale up. Basically, not all of your properties will underperform at the same time. And the last key idea is it's a marathon not a sprint. This sums up the whole idea that for rental properties, the benefits are long term and to get there, you have to get through the short-term variability and just have that long-term mindset.

 

 

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