Sure, there are reasons – good reasons – to not own rental property: tenants, vacancies and repairs, to name three. But have you ever spent time thinking why owning investment real estate might be a good idea?
Last year, my father-in-law was rushed to the hospital with what doctors thought was a massive stroke. When the ambulance arrived, he was taken directly to ICU where a ventilator was inserted, and to prevent further injury, he was given medicine to induce a coma.
Kim and I had to live at the hospital for several weeks. Gotta tell you, an ICU’s waiting room is full of interesting life lessons.
Also in the waiting room was the family of a twenty-year old man who was in a serious motorcycle accident. One of the family members told me that the accident victim would eventually recover physically, but financially he was in a lot of trouble. She said that he’d probably lose his job, home and car. On top of that, a couple of the family members, because they don’t have any savings, find themselves between a financial rock and a hard place. They wanted to stay and support the boy, but because of financial obligations they had to leave his side and go back to work.
Another man in the waiting room had a son in the ICU. He’d been shot at point-blank range ten days before and is probably paralyzed for life. The father was staying at the hospital around the clock to tend to his son, but with both father and son not working, financial ruin was at their doorstep.
One night, a woman and her young son were rushed to the hospital after being involved in a head-on collision. Because of her serious injuries, she’s in ICU. A large number of her family members are keeping a vigil in the waiting room. The next morning, three of the family members were discussing how this young lady was going to pay her bills. She won’t be able to work for several months as she heals from the crash.
It’s reported that most Americans are two paychecks away from being broke. Are you in this category? If so, there’s a lot you can do to change your circumstance…but you must be willing to work and sacrifice.
First, cut your expenses to the bone. Get rid of the bling. You don’t need to eat at restaurants five to ten times a week. You don’t need a shiny new car. You don’t need three hundred TV channels.
Second, increase the amount you bring home. Pick up a part-time job. Ask for a raise. Get a better paying job.
Third, invest the difference between what you bring home and what you spend in an appreciating asset. This is something that will go up in value over time – like rental property.
Kim and I were able to stay at the hospital and not fret over our monthly bills because we live well below our means; plus, we have rental property, which brings in mailbox money.
Thankfully, Kim’s mom and dad also own rental property. While her dad was in the hospital, and then home recovering, their monthly cash flow did not slow down. Where would they be right now financially if they hadn’t made the decision (and sacrifice) way back when to become landlords?
Now for a little good news: Kim’s dad did not have a stroke. He’s OK and back at work – a business that he owns!