Price - $380,000 Lot Size - 7.01 x25 Metres
3 Bedrooms 2 Washrooms Finished Basement
Price $600,000 Lot Size - 80x175 Feet
3 Bedrooms 2 Washrooms Finished Walkout Basement
Price - $2,695,000 - 5 Bedrooms - 8 Washrooms - Finished Walkout Basement
Mobile App Games are a fun way to idle away time while sitting in a dentist’s waiting room or while your boyfriend is watching sports on the only tv in the house, but can they be instrument in your financial success? I took on the challenge of playing an online version of Monopoly, for one month to see what it could teach me about investing in real estate.
1- Always keep a cash reserve
Don’t ever spend all your money, leave yourself a fund for unexpected expenses and opportunities. If you’re faced with a surprise repair, reno or vacancy period you’ll have a cushion fund to keep you afloat. Having cash also means when opportunities for great deals surface, you can act fast and scoop them up.
2- Cheap properties give good ROI and are easier to build monopolies
I’ll trade in my Boardwalk for St. Charles Place anyday! Less expensive properties are easier to buy because you need less money to purchase which means you can easily accumulate lots of them. Having less of your money invested can also mean a better return on your investment, especially when rental rates are relatively the same. This means, I don’t need tons of capital to invest so I get to keep more money in my pocket. Not to say that I would never ever buy Boardwalk (i.e. expensive property)...but at the start of the game putting all your money in Boardwalk leaves very little to buy more which means you are tapped out very early.
3- Don’t get sucked into bidding wars
Overpaying for properties is a waste of your investment dollars. Each dollar higher than market value eats into your net profits. The only time to overpay is when the end benefit is more profitable than the added costs. In the game, it may be the last property to make a monopoly whereas in your real life, you may be doing a land assembly to rezone/rebuild. These types of situations may call for a much bigger end gain, which could warrant paying a higher price.
4- Railroads are cash cows buy cash cows!
Properties that bring in a healthy cashflow will build your wealth and cash reserves much faster. Go buy them!
5- It’s easy to buy from highly motivated sellers
Once you are in a market where the general public is overleveraged and low in cash (i.e. living pay cheque to pay cheque), any unexpected expense can force people into a desperate situation where they must sell their assets/properties to pay off debts. Motivated sellers are ready to negotiate which means great deals for you.
In the end, buying properties with fake money was a great way to practice different strategies and gain knowledge. It may not be the real world, but after about 100 rounds you will definitely notice trends and strategies that would otherwise have taken years and lots of money to learn in life. Keep learning and growing. Until next time, Happy Investing!
Lisa Inthecity Colalillo
Lisa Colalillo is an investor, self proclaimed real estate junkie and blogger at www.lisainthecity.ca, and real estate agent for Royal LePage Professionals.
Best Price - $875,000 Lot Size - 67x189.75 Feet
3+1 Bedrooms - 2 Washrooms - Partly Finished Basement with Separate Enterance
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