It is amazing to see how we all respond to hope. It is probably the most powerful emotion and most important investing skill that we can build a foundation on.
Think about this investing skill for a minute. So much of what goes on in our lives is driven by hope.
This list can go on extensively, and it includes very minor, routine purchases.
For example, why do we buy fertilizer for our grass? Because we hope that it will lead to a better looking lawn.
This is a powerful emotion and investing skill that is often overlooked when we are dealing with people.
Although we know the return on investment of a rent to own home can be very good, which is why it is appealing to us as an investor. The underlying reason that this type of investment exists is because it provides hope to people that can not purchase a home. It allows them to move closer to a goal.
Essentially we are acting as a stepping stone for others to cross the river into home ownership.
What so many investors get wrong is that they become very structured in their interactions with potential tenant buyers. They only focus on the technical aspect of the home, which is the monthly pricing, without giving any thought into the needs of the tenant buyer that this home is fulfilling.
Time and time again we have seen that the most successful investors have this investing skill and are the ones that genuinely care. The ones that are helping to fulfill the hope that their tenants are bringing to the table.
The more real you can make the possibility of their hope becoming reality, the more interest you will have in your property.
But with this investing skill there is one very large caveat.
Yes, investing is a business and needs to be treated as such, but no business has success without caring for their clients. A true, genuine level of compassion with a sincere goal of helping people attain what they hope for is the investing skill that sets businesses apart.
It is the investing skill that can make you excel over the guy two blocks over, with a property for rent as well.
And this isn’t a thought process that applies to rent to own homes only, not by a long shot. One of the biggest selling features multi-unit building owners focus on when renting out apartments is safety.
The tenant is hoping that their apartment is going to provide them and their family a good, safe place to live. By recognizing, acknowledging and fulfilling that desire you gain a competitive advantage over others.
Understanding this investing skill is high level thinking, but you have already shown you are capable of this high level investing skill, so use it wisely.
We could take this same principle and apply it to something as large as global finances. For example, the demonstrations and rioting in Greece started when people realized all the cutbacks that were coming. Their hope for something better was removed because many programs and funding were going to have to be cut for the country to stay our of bankruptcy.
Large protests and unrest are starting in countries in a similar predicament.
These topics are for another time but serve to demonstrate the down side of not offering hope to the people who are working with and for you.
We have long spoken about investing into demand. It is a simple principle if people are looking for what you have then your chances of renting or selling it to them go up dramatically.
That is why Nike isn’t in the business of making Clogs.
The demand for a wooden shoe to sustain a company of that size doesn’t exist, it doesn’t matter if they made the best clogs known to man kind.
Recently, a member asked for an opinion on the potential purchase of a $300,000 home. The only problem was that most starter homes in this area sell for at least $50,000 less.
Without knowing all the details of the opportunity the first thought is that the price point is too high, because you are instantly eliminating the majority of the real estate market once you exit the starter home category.
To his credit, he is a smart individual and he was already well aware of this and just wanted to bounce it off someone else.
There is and always will be opportunities in markets above the starter category but when entering those be sure to have done your homework.
With this investing skill you'll be able to go in with more knowledge than you need and follow a proven game plan because you will be catering to a smaller segment of the market so the need to be laser focused is even more important.
Don’t let your own ‘hope’ cause you to out think yourself.
You have the knowledge you need to succeed.
You have what you need to succeed, let someone else reinvent the wheel and then take those lessons and apply them to your business.
More success has been caused by the implementation of that invention and the best part is that it is easier.
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