Economics 101 and Real Estate Investing

Buy low, sell high.  It’s the backbone of profitability in economics.  There is not an exception to this rule in real estate investing, but there is a slight twist…  Buy low is still key, but we don’t necessarily have to sell high.

Buy low, sell average. 

Does this really work?  Yes, in real estate investing it does.  And it’s what make real estate so great.  If we can buy low, we are not locked in to the extreme requirement to rent high or sell high.

You don’t have to be the highest price house on the street or be the highest rental unit in order to make money with real estate.  In fact it’s much better if you aren’t.  Being smack dab in the middle of the market, or middle high, will be best.

Super high rents naturally leads to vacancy.  And an empty house cost you money.  

Super high sales price naturally leads to not selling.  And an empty house cost you money.

Pricing your deal is a huge component of being successful in real estate investing.  Buying low gives you options.  The better you buy your deal the easier it is to fit in the market.  The buying low component allows us to not have to stretch our pricing in order to have profit margin.  When we buy right we can fit right into the ARV (after renovation value) properly.

There’s profit in buy low, sell average in real estate investing.  

BONUS:   If you go high and you go big – earn it! Quality is a must, so you’ll need to go above and beyond. Adding a WOW Factor, having a unique design or location, or providing additional services or amenities may justify capturing that higher price.  

There’s profit in buy low, sell high in real estate investing!