After reading the introduction of Frank Gallinelli’s ‘what every real estate investor should know about cash flow,’ I realized one of my faults in tackling this goal. I was looking for a rental property based on how its appearance made me feel, and assuming that its cashflow profile would just happen to be profitable. Oops. In order to be a responsible investor, the cashflow of a property is the only thing to consider. Buying an investment property shouldn’t be based on my feelings towards it. To make a wise investment, I should look exclusively at the numbers. In the author’s words, “If you need that warm fuzzy feeling, get a puppy.” Or drink coffee / have sex / eat chocolate / listen to music / open a CD. But NOT buy a rental property.
Its still OK to appreciate the good vibes from beautiful properties and showhomes, as long as I’m clear on my priorities. Appreciating good taste isn’t irresponsible, as long as I don’t mix it up with my investment goals. I can just walk through my favorite neighborhoods, and admire the beautiful landscaping that other people have done. This way, I can experience the beauty they offer, without putting my pocketbook at risk!
