The other day, I was going through some of our kids’ toys, thinking about what they’ve outgrown and what they’ll be growing into next. They’re not quite ready for it yet, but I’m really looking forward to having family board game nights as they get older. Playing Monopoly, Clue, Life, and other games will give us all time together, away from our screens and responsibilities.
As I was thinking about different games I played with my family when I was a kid, I thought specifically about Monopoly. It’s funny, but I think that this old favorite board game can teach us a lot of lessons about investing in real estate, and especially about house flipping.
INVEST EVERYTHING YOU CAN
Want to win at a game of Monopoly? Buy all of the properties you can afford! That’s really true for real estate investing, too. If you fix and flip one property at a time, you can make decent money. But if you have multiple flips going on simultaneously, you can continuously bring in cash so that you can afford even more investments, with or without help from a hard money lender or investing partner.
YOU HAVE A LOT OF OPTIONS TO WIN
What’s your Monopoly strategy? Do you buy up the properties that people are most likely to land on when they get out of jail? Or do you go straight for Boardwalk or Park Place to get the highest rent? There’s no single way to win at Monopoly, just like there’s no single best way to invest in real estate. For some people, fix-and-hold properties are the best option. I prefer fix-and-flip houses, and some other real estate investors stick to wholesaling. If you have a good strategy, you can make any real estate investing niche work for you.
LEARN THE RULES AND USE THEM TO YOUR BENEFIT
In a game of Monopoly, the player who has the best understanding of the rules is going to have the best chance of winning. The same is true for real estate investing. If you understand the laws, regulations, and rules that apply to making wise investing decisions, you’ll be more likely to invest in the right properties and make the right moves—without ever landing in jail (or, in the case of most real estate deals, suffering a fine)!
LOCATION MAKES A HUGE DIFFERENCE
No matter what your strategy is in a game of Monopoly, location matters. If you buy property at every space you land on without a plan, you’re going to go broke before any of your properties pay off. On the other hand, if you skip investments that don’t make sense for your strategy, and you wait for the right properties for your needs, you’ll be sure to get great deals that will really pay off for you in very short order.
So, when you’re looking at potential investment properties, think about property values in the area, how many people commute to work nearby, if your potential flip houses are in a good school district, and other location details. That way, when the right deal in the best location comes along, you won’t be tied up with a deal that won’t make you as much money or won’t pay off at all.
The more I think about it, the more ways playing Monopoly can apply to real-life real estate investing. What do you think? Will you be pulling out the old Monopoly board for a game or a lesson tonight?