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Monopoly and Life: Important Lessons for Real Estate Investors (& Kids)

Today’s post is a guest post from Ian Cook at Carpe Diem MD. Ian is an ER doc focusing on Wound Care and Hyperbaric Medicine while his wife, Lauren, is an interventional radiologist. Like mine, their blog is new. While also focusing on physician lifestyle, Carpe Diem MD has a unique focus on investing through short term rental properties. This is something that I definitely could learn more about. But, how does it relate to monopoly and life?

Take it away Ian!

We’ve all played Monopoly at some point in our life. The game usually lasted hours and ended in fighting and tears between siblings. The winner would celebrate with their cash in hand. The remaining players went bankrupt.  

My daughters brought back vivid memories of this game when we played this summer.  My youngest daughter was a natural.  She had luck and knew how to make a deal.  She would offer cash and trades to acquire Monopolies that would benefit her. Maybe most importantly, she would refuse to trade with me. And, she would strategize with her sister to knock me out right away.  After that, she would make quick work of her sister and mother.

At first, I thought she was just a lucky little one.

The truth was that she is a smart little investor

She knew how to keep cash reserves and would spend her money accumulating properties at the corners of the boards.  She would avoid buying every property that she landed on.  Instead, she would develop her properties by adding houses and hotels.

Her sister on the other hand would buy everything and leave little cash free.  

You can see where this is going.  

As the game played out, her sister would end up owing rent and would then sell properties for cash. Bankruptcy was inevitable and the tears were flowing.   

This is life (and Monopoly)

However, in the real world the game is not a zero-sum game.  

You can play the game of “Monopoly” by building your own real estate portfolio without bankrupting your sister.

Many of the principles of Monopoly can be applied to real life 

monopoly life
Who gets to be the thimble?!
  1. Buy and Hold Real Estate
  2. Develop your properties to increase value and rents
  3. Keep cash reserves to handle unexpected expenses and avoid bankruptcy
  4. Have fun playing the game. Don’t let it end in tears

My wife, Lauren, and I believe in playing the game of Monopoly and that investing in real estate is the best avenue to long-term generational wealth in real life 

There are many options available to you in real estate: 

  • Single family homes 
  • Small multifamily (duplexes, triplexes etc)
    •  (Ed. – This is my current niche, more about that here!)
  • Large Multifamily (apartment complexes)
  • Storage units
  • Mobile home parks
  • Commercial real estate
  • Short-Term Rental properties
  • And the list goes on…

The key to real estate is to find a niche that you enjoy

Some areas of real estate are more profitable than others.  But, the key is to find a niche in real estate that you enjoy.  It is important to find the right balance between profit and joy

Lauren and I enjoy Short-Term Rental property investing

We like looking for properties with hidden value, under rented, neglected units and turning them around.  In addition, the ability to use these properties for trips with family and friends in a major benefit of this form of investing. 

We also invest in Multifamily properties.  The advantage of multifamily is stability when compared to Short-Term Rental investing. The stable income of Multifamily investing often results in less cash flow when compared to Short Term Rental properties, however.  

But, you can increase the value of Multifamily properties via forced appreciation which can help you rapidly grow your portfolio.  Forced appreciation is more difficult to achieve with Short Term Rentals.  So, each area of real estate has its advantages and disadvantages.

Lauren and I invest in BOTH Short-Term Rental properties and Long-Term Multifamily properties.  We use the cash flow from our Short-Term Rental properties to assist in purchasing additional STR and LTR properties.  

In the end we believe that Monopoly is more than a game for children 

It is full of life lessons that most of us forget.  Lauren and I have rediscovered the game and hope that you will too.  

If you would like to learn more about Short Term Rental Investing and the Carpe Diem MD philosophy to investing, check out their awesome blog!

What do you think? Any life lessons that you have learned from Monopoly or any other games? Have you started investing in real estate? What about short term rentals? What would you do if Get Out of Jail Free cards existed in real life?

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    Jordan Frey MD, a plastic surgeon in Buffalo, NY, is one of the fastest-growing physician finance bloggers in the world. See how he went from financially clueless to increasing his net worth by $1M in 1 year and how you can do the same! Feel free to send Jordan a message at [email protected].

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