Investment Properties - A Sprint or a Marathon

Posted by Tom Hernandez on Wednesday, October 19, 2022 at 4:03:01 PM By Tom Hernandez / October 19, 2022 Comment

In this episode, we are joined by Michael Tootikian, a top commercial agent with Keller Williams in the Los Angeles region. We discuss owning rental properties as a significant way to create long-term wealth in addition to serving as a hedge against inflation. Michael outlines the tactics that many investors employ when buying rental properties. One is a sprint approach for wealth that prioritizes cash flow. Alternately, the marathon approach makes advantage of appreciation and depreciation to build wealth over a longer time span. According to him, many of his clients have employed both strategies, depending on their goals when purchasing the rental property. Michael makes it apparent that investing in rental homes is not a "set it and forget it" proposition. Making the most of owning rental properties requires having the appropriate procedures and tools in place. Every real estate owner has to start somewhere, and Michael can look back on all of his former clients and recall when each one acquired their first rental property. The main takeaway from this episode is to purchase your first rental property as soon as you can, because it will eventually snowball into bigger and better projects.

Deciding Whether to Buy an Investment Property: A Sprint or a Marathon?

You've done your research and you're thinking about buying an investment property. But should you go for it? Is now the right time? When it comes to making the decision of whether to purchase an investment property, it's important to think about it as a sprint or a marathon.

On one hand, you could go for it and purchase the property as quickly as possible. This could be a good option if you're confident in your ability to manage the property and you believe that the market conditions are favorable. However, there is always the risk that something could go wrong.

On the other hand, you could take your time and approach the decision as more of a marathon. This means doing your due diligence, researching the market, and taking your time to find the right property. This approach is often seen as less risky, but it can also mean missing out on opportunities if the market conditions change.

The Pros and Cons of a Quick Purchase
When it comes to buying an investment property, there are pros and cons to both a quick purchase and a more gradual approach.

If you're thinking about going for a quick purchase, some of the pros include:
- You could get a good deal on the property if you're able to act fast
- You could take advantage of favorable market conditions
- You would have less money tied up in the property since you would be able to get it financed more easily
- You would be able to generate income from rent sooner rather than later

However, there are also some potential drawbacks to consider:
- There is always the risk that something could go wrong with the property
- If the market conditions change, you could end up losing money on the deal
- It can be more difficult to get financing for a quick purchase
- You may not have enough time to thoroughly inspect the property before making a decision

The Pros and Cons of Taking Your Time
Alternatively, if you're thinking about taking your time with your purchase, some of the pros include:
- You would have more time to inspect the property and make sure that everything is in order
- You would have more time to research the market and look for favorable conditions
- You would be able to get financing more easily since you would have more time to save up for a down payment
- There is less risk involved since you would be able to make a more informed decision

However, there is one potential drawback:
- You could miss out on opportunities if market conditions change while you're waiting.

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