Buying your first investment property can seem daunting. However, getting started in real estate investing can be a great way to move forward in your path to financial freedom. Real estate investing can provide its owners with anything between a little extra cash flow, a safety cushion of equity, or generational wealth. But, of course, it all depends on your goals, how you structure them, and what you put into them. There are a few things I wish I had known when I invested in my first rental property. I learned how to estimate the cash flow, repair costs, and identify a marketable product. However, I didn’t know or consider how location affects growth opportunities, how to add value through forced appreciation, or how inflation affects the rental market. Real estate investing is not for everyone, and it has pros and cons. Pros Cashflow Effective use of leverage Appreciation Potential Tax Benefits Cons Not hands off Low Liquidity Could lose value Before investing in a rental property, it is essential to start from a sound financial footing. There is a high transaction cost to buying and selling real estate. If you are not in a good financial position, you may be tempted to sell your investment in a year or two. Further, you may get forced into selling when the timing is not ideal for profit because you need the money. Being able to sell when it is ideal is why it is vital to get a reserve fund, minimize your consumer debt, and get your finances in order before purchasing an investment property. Single-Family vs. Multi-Family When deciding on your investment strategy for your first property, you will have to choose between buying a single-family residence (SFR) or a multi-family building. While many people see purchasing a single-family home as a stepping stone into a multi-family home, that is not necessarily the case. If you want to focus on multi-family apartments, it is possible to start with them directly. One advantage of investing in a single-family property is multiple exit strategies. You can sell it to another investor rent-ready or with a tenant in place. You can also sell a single-family residence to a buyer that plans on using it as their primary residence. One fascinating strategy I have seen people succeed with is trying to buy in the path of progress within a community, rent for a few years, and renovate and sell. Multi-family apartments typically get built from the ground up. That makes them great to operate as rental properties. That can translate to lower maintenance costs, more efficient floorplans, and better rent-to-value ratios. How To Pick a Property Many investment styles can work. Real estate investing is not a one-size-fits-all sort of process. It is crucial to figure out your preferred investing model, define what property fits this model, and find a property that fits these criteria. Suppose you do not set out with this level of intentionality. In that case, you will

This week I encountered an article (from March) by Cal Newport (author of Deep Work) on the topic of smartphones, social media, and their effect on attention spans and mental health. The very short summary is that we have enough research on the topic at this point to be able to confidently say, “it’s bad for you.” Newport writes, “We should consider taking as strong a stance against ultraprocessed content as we already do against […]