to be objective. The prettiest property
in town doesn’t mean much if it costs
too much and can’t generate income
from rents. Investors need to consider
cold hard facts and figures — a process
that Jason Hartman sums up as Three
Dimensional Real Estate Investing.
from Jason Hartman’s
Financial Freedom Report
Those three dimensions allow an
investor to take a clear look at the
key parameters that indicate investing
success:
here are plenty of times
when the heart, not the
head, governs deci-
sion-making. We buy a car
because it fits the image we want to
show the world, choose clothes that
make us feel good. But while emo-
tions have their place in the choices
we make, successful investing re-
quires decision-making that’s objec-
tive, not subjective.
Price
Emotions can enter into this aspect
of buying a property, too — it’s easy to
jump at a property just because it looks
like a bargain, or sellers say it won’t
Subjective
decision-mak-
ing is the kind
that’s ruled by
feelings rather
than facts and figures. And there’s a
place for that in real estate too. When
you’re choosing a place to make your
home for at least a few years, your
feelings can — and maybe should
– play a pretty big role. If price and
other “objective” considerations are
equal, choosing a house that reminds
you of your childhood home may
make sense.
last long. Those kinds of feelings can
make price the sole determining factor
of whether a property makes sense. But
the objective investor also considers:
Financing
Again, emotions ranging from com-
fort (there’s an easy way to handle the
process with friendly lenders) to fear
and aversion can overrule more im-
portant factors such as what terms and
rates work best for individual investing
goals. Investors making impulsive
But when it comes to investment
properties bought with the intent to
generate income, decision-making has
Realty411Guide.com
PAGE 12 • 2014
decisions can end up paying more or
getting less.
Cash Flow
Not much else matters if the property
doesn’t produce the desired income.
Calculating the Rent to Value ratio and
other factors gives a clear picture of the
cash flow potential of a given prop-
erty – and those figures need to guide
decisions.
In other aspects of investing, too,
the head has to prevail over the heart.
Choosing advisers not for expertise,
but for personality, or skimping on
learning about the investing process
because it’s boring, won’t get an in-
vestor very far on the road to building
wealth.
How to keep decisions objective —
and put those pesky feelings in their
place? The key, say life coaches and
financial experts, lies in mindfulness:
pay attention to how you’re feeling
and what seems to be pulling you to or
away from a given option. Have clear
goals, too, and know what steps you
need to take to achieve them – a way to
keep the head, not the heart, firmly in
control of your investing success. v
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