Blog | Entrepreneurship, Personal Finance, Real Estate

Why Real Estate? Control!

Women, it’s time to regain control — that’s why you need freedom of choice.

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There comes a point in your investing life where the cash flow from your investments supports not only your living expenses but also your next investment. Your cash flow breeds new assets that, in turn, breed more cash flow.

But financial success isn’t just about making the money; it’s about having the freedom to choose how. In this blog, we’ll cover how real estate is the best way to regain control, while generating cash flow.

Why cash flow?

Before we dive into real estate, let’s discuss why generating cash flow is the guaranteed key to building infinite wealth.

Saving does NOT equal retirement

It’s not easy—in fact, I would say it’s almost impossible—to save the amount of money you will need to retire.

Most people still have to do some sort of side work when they retire. They either don't have enough saved in their retirement accounts, or they are losing money because of market fluctuations. That's the problem with relying on capital gains for retirement income.

By focusing on cash flow, however, you can achieve your goal of building up your income to equal or exceed your living expenses, each and every month. Cash flow frees you up to get on with your life and to do what you really want to do. You're not dictated by the constraints of money.

Cash flow breeds cash flow

My first cash-flow investment was a small two-bedroom, one-bath house in Portland, Oregon, in 1989. My monthly cash flow averaged a massive $25 per month. Not a lot, but it gave me my start. And that first step was, by far, the toughest. I wasn’t sure if I could actually go through with it. I had enormous amounts of fear.

But that $25 was much more than a few dollars in my pocket. It was the first building block towards the cash flow I enjoy today. It turned out to be a lovely cycle.

It’s good to be in control

I don't like to invest in things where I have no control, especially when it comes to my money. I am not a stock trader or a flipper (one who constantly buys and sells property). I am not good at timing the highs and lows of the stock market or the real estate market.

I can't control the markets, but I can control my rental properties and my businesses.

That’s why real estate is the best way to generate cash flow, while having all the control.

Rental properties put you in the driver’s seat

Real estate is my favorite investment vehicle for many reasons: it's fun, profitable, and it gives me the freedom to choose and control my own investment. Yes, in real estate, you actually have a tremendous amount of control over your investment. Unlike in other investment classes (such as stocks or commodities), in real estate you play a starring role in your investment's success.

Let’s face it: Money is one of the most stressful parts of life for most people. Oftentimes, it’s because people feel like they don't have any control over their money. It seems as though everyone is clamoring for your money — whether it’s your utilities, insurance, mortgage or taxes, everyone wants a piece of your pie. Many times, you don't even have a say in where your money goes.

You also have limited control over the money you invest. You can choose where to invest, picking your preferred asset class. But even the savviest investors with tremendous financial knowledge are limited in their power to control how an investment performs.

Freedom of choice

And this brings me to why real estate is so enticing. When you invest in real estate, you have 100% control over your investment. You do the research, you call the shots, and you profit from the results of your hard work. When it comes to investing, real estate gives you all the freedom to choose the components that will generate cash flow.

When you invest your money in a company or buy a share of their stock, you have little say or impact on the success and value of that investment. In most cases, you give the business your money and then stand by on the sidelines, watching and waiting to see if it succeeds. You can do your homework and study market trends, but at the end of the day, companies are run by people who aren't you. They make decisions that affect your money. If you want to personally increase the value of the company, or if the company starts to fail, there's not a lot you can do besides sell your share. Basically, you're in the passenger seat just along for the ride.

In real estate, on the other hand, you are in the driver's seat throughout the entire process. If I buy a piece of real estate, I can personally increase its value. I have the power to make changes to the physical building, market it with increased signage, make improvements to the landscape, add amenities, or bring in better management. The possibilities are endless. There's a lot I can do and it's all within my control. The power is in my hands, and so are the profits.

Your money, your control

Leaving your money to chance is not a solid financial plan. At the end of the day, don't you want the freedom to choose how your money is used, and where your future is headed?

Below are three things you get to control when you invest in real estate. Remember: All of these decisions are within your power, and the profits you make become extra cash that you can do whatever you want with.

How you profit

When investing in real estate, there are two things you can invest for: cash flow and capital gains. As I’ve noted earlier, my preferred method of investing is for cash flow. When you invest for cash flow, you invest in properties for the long-term because they will provide a steady stream of income each month that you can pocket. Investing for capital gains, on the other hand, involves buying a property and then selling it for a one-time payoff.

When you buy a real estate investment, this choice is yours to make. For what, exactly, will you invest? Do you want to make a long-term investment, and profit off the steady flow of cash each month? Or do you want to flip the property quickly, and invest for a one-time sum?

Both strategies can be lucrative when executed correctly. And the great thing is, you have direct control over how you will receive your returns.

Most other investment vehicles don't give you a choice in how you will profit. Or if they do, there are a lot of rules dictating when and how you will receive your returns.

But with real estate, you have more flexibility to earn the profits when and how you want to. You can set rent, and buy and sell properties when you want to, without anyone dictating how you profit.

Your investment's value

You have the power to directly increase your real estate investment's value. Almost no other asset class lets you have this type of impact or control. Like I mentioned earlier, you have no say in how stocks will perform or what commodities are worth. So many external factors, from politics to war to economic cycles, can impact your other investments — and this leaves many people feeling powerless.

But in real estate, you can take action that will directly reflect in your profits. You can make improvements on the property, increase the square footage, get creative with the property lot, and increase the efficiency of the property's operations, all to increase your ROI.

How many other investments can say that? If you invest in a company, that doesn't mean you can start rearranging their business operations to make it more profitable. You have no power to increase or decrease the price of oil so that you get better returns.

But with real estate, the power is in your hands. And while it can be a huge responsibility, it also symbolizes sweet freedom to those who recognize its power.

Who you work with

If you invest in a business, or purchase a share of a company's stock, do they call you up every time they decide to hire a new employee? Of course not!

But when you invest in real estate, the choice of tenant is yours to make. You get to choose whether you rent your house to a group of rowdy college kids or a nice newlywed couple.

You also control who you invest with. One of the best parts of real estate investing is getting to use other people's money (OPM) to purchase your investment. That’s right! You don't have to fund the whole investment by yourself, because there are at least 6 ways beginners can find investment money. One way is to approach other investors to help you purchase the property.

If you put together a strong deal, you will attract plenty of investors who want to give you their money. The best part is that you get to choose who you work with.

Finding and building the right team of investors is vital to your investment strategy, which is why you need to work with people you trust. Not all investments allow you that choice. Other people's actions and choices affect your money all the time. Real estate investing is one area where you have some say in the people who surround your investment, so enjoy that perk.

Don’t let fear get in the way

A young journalist approached me a while back and said quite passionately, “We have to make women aware that they have to take charge of their money. They cannot depend on someone else to do it for them!”

Not surprisingly, there are a lot of women who are afraid of having that much control over their investment - historical narratives have made us believe it’s a man’s game.

For starters, it's a lot of work. If you want to improve your investment, you have to do the work and make the arrangements, which can take a lot of time and effort.

Well, ladies, I’m here to tell you that as women you NEED to get into the game of investing. Here’s why:

More and more women, especially as they become older, aren’t prepared to take care of themselves financially and, unfortunately, can be too afraid to control their own finances.

Simply put, not taking the “risk” is riskier than you think.

Learning to invest in assets like real estate, allows you to depend on yourself, not on others, for your financial well-being.

Regaining control

There are so many aspects of life we don’t have any control over — but money should be one of them. If you're looking to take back control of your investments, it might be time to turn to real estate. Remember, financial success comes with having the freedom of choice.

Before you make up your mind or dive into your first property purchase, continue increasing your financial IQ by researching other pros and cons of real estate investing. The more knowledge you amass prior to taking action, the better prepared you’ll be for the responsibility of stepping into that driver’s seat.

  1. Statistics: Almost half of women ages 64 and older are considered “unpartnered,” and yet are expected to live longer than men. Once divorced, a woman’s standard of living drops significantly, and they’re left with very little saved for retirement.

  2. Avoid dependency: Most women don’t go into a marriage expecting to end up divorced. Along the same line, most people don’t begin a new job expecting to be laid off. Both happen, however, and today they happen with more and more frequency. I’ve said this before, but, women, if you are depending on a husband, a boss, or anyone else for your financial future, think twice. They simply may not be there. Too often we may not even realize just how dependent we are until we’re faced with our own personal wake-up call.

  3. No glass ceiling: In the world of investing, the markets don’t care if you’re female or male, black or white, a college grad or a high school dropout. The markets only care about how smart you are with your money. The key is education and experience. The smarter you are with your investment choices, the greater your success as an investor. There are no limits, no ceilings, glass or otherwise, for women in the world of investing.

  4. No limits on income: Whether we like it or not, there is still a huge inequality when it comes to the world of work for women. Because of this a woman is often limited in the amount of income she can make as an employee. In the investment world, you are completely responsible for and in control of the amount of money you make.

  5. Increased self-esteem: Personally, I think this is one of the greatest benefits to women investors. It’s not unusual to have your self-esteem linked to your ability to provide for yourself. I’ve seen women’s self-esteem soar once they know how to make it on their own financially. And when a woman’s self-esteem rises, then relationships around her tend to improve, her life improves overall, and she feels good about herself. Increased confidence leads to higher self-esteem. Higher self-esteem leads to greater success. And greater success leads to financial freedom.

  6. Control of your time: As an investor you are in control of your time. Managing real estate is something you can do part time or full time. It is something you can do from home, from the office, or from anywhere. It is also something into which you can include your children. Many mothers have told me they take their children to look at properties for their next big way to generate cash flow. And a big plus is that when you include your children in the investment process you are actually teaching them to be investors as well.

Original publish date: January 25, 2017

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