Over the past several years, I have met a number of real estate investors who have owned real estate for a long time. A long time in real estate terms can be 25 to 30 years. During this time span, it is very possible that the mortgage for the rental property has been pay off in full.
The one commonality that these long time investors have, is that they have created cash flow for themselves. Now, because their mortgage is paid down, they are able to reinvest the cash flow from their rental property as they so chose.
The smartest real estate investors in my mind are the ones who held onto their rental properties over the long term, and did not sell their investments, no matter how tough things got.
They are the smartest investors because they have created an income stream for themselves that will always be there, just as long as their rental properties stay rented.
Here lies the greatest problem that most real estate investors face. Most people don’t stick it our for 25 to 30 years with their rental properties. Most people in fact sell their properties when the going gets tough.
Any experienced real estate investor will tell you that the going can get very tough. There will be times in which you wonder why you ever became a landlord. There will be times in which you might be losing money in the thousands of dollars, due to repairs, maintenance and vacancy. Things may seems like they will never improve and that you will continue to lose money as you maintain your rental property.
Most people break and throw in the towel by selling off their rental property. This is the biggest mistake that you will make as a real estate investor. You can never give up. You must be committed for the long haul. If you are committed and you stay the course for those 25 to 30 years, you will have won the real estate investing game.
You will have an asset free and clear of a mortgage that will have gone up in value and that will be providing you with cash flow.
So if you are a novice real estate investor, you must consider the following….
When you buy your first rental property, never sell it. Keep it for the long term and enjoy the cash flow that you earn each month when your mortgage has been paid off in full.
Best Regards,
Neil
