My wife and I were right in the middle of buying our third home. We had always wanted another house on multiple acres of land. This particular house had 3 acres of lush Florida land. The home was beautiful, as well as the land. I knew we could make money off of the property, we just needed to learn how. I was a bit nervous about the mortgage payment. Our current home’s mortgage was $1100 a month but was supplemented by 2 roommates paying $500 each. The third home’s mortgage was being quoted at $2000 a month. I knew that we would have to pay more out of pocket, which I really did not want to do. However, my wife and I knew that this property was a vital piece of our grandkids’ future, when we had them. The home was very important to us, personally.
We finally closed on the third house, with a final mortgage of $1750. Our roommates decided not to move into the home with us, so we had to start from scratch. Walking around the two big, empty master suites, I just knew that we could rent each of them out for $800. For us to suggest others to pay this much money for a room was a huge deal. How much value would we need to add to the rooms? We had to ensure that the rooms matched the price level that we set.
From there we got to work. We added nice furniture flourishes and colorful window treatments. We also added a bigger refrigerator to each room. For extra value, we added satellite tv and HBO, along with Hulu and Netflix. We knew that we were competing with stand-alone apartments. We felt that we had positioned our rooms to offer more value than an apartment building.
No matter how we felt, the rental market would ultimately decide what we could charge. The rooms went up and within a few days, both were rented. Not only did they rent fast, but the tenants have also stayed with us for over 6 months. In fact, they are the only tenants to hold these rooms. Being able to make $1600 a month while living in the home is a blessing. We are able to put this money straight into investments.
More importantly than investing the money, the rentals have shown us that we have unlimited power in this environment. With a few upgrades, like an external door, we can increase what we ask for rent. If someone else is paying for our home, and we can still live in it, that means that anyone could live in the home. Our kids could take over this home and live for free as they attend college. If I were to pass early, my wife could continue to rent the rooms and live very comfortably. The options are truly unlimited. We also know that if we bought another home, we could do the same exact thing.
Therein lies the secret of visualizing money. You have to be able to see how to turn something (anything) into an asset. An asset is something that produces money for you. A liability is something that takes money away from you. A house is usually a liability. Ours is an asset. I love collecting and playing videogames. Currently, they are a liability. However, if I were to create a local game rental store in my home, then they would become assets. Another example is that my house naturally grows bamboo. How can I monetize it? My mind is starting to work like this. I admit I am very to new this. Real estate is easy to visualize, for me. I go to Zillow and look at homes and envision how I would monetize them. I am working on becoming more proficient at other assets by reading and learning.
In order for me to get to a place where I do not work for money, I will have to use my mind to visualize making money. The question I should always ask is, “How can I turn this into an asset?”
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
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