PLANTING SEASON for BUY AND HOLD properties
Gardening and farming? What are they doing on a real estate investing blog?!? The similarities between gardening and investing are as prolific as the seed catalogues available these days. The basic premise is to grow beautiful and/or nutritious things—or to grow your wealth/financial freedom.
Let’s start with the planting season. When you first plant your garden, you don’t expect flowers, fruits and vegetables overnight. A lot of time and energy goes into creating the optimal soil conditions, preparing the planting area, picking out the right seeds or small starter plants, and even the tools that you’ll need to dig just the right space for those precious young plants/crops. Many people will design their garden or fields for the ideal sun/shade/growth. Investing of any kind is no different, especially real estate investing. We start with a vision: why are we going to put time and money into this project anyways? Then we look for good growing conditions: jobs? people moving in? affordability for renters or buyers? Which specific plants/crops fits for your garden: condo’s, houses, multi-family, rent-to-own? And where is your desired investment plot (city or province) at when it comes to the natural real estate cycle? Getting those plants in the ground requires considerable effort, research and planning.
But then, it’s growing season. Time, water, sun, and nutrients will grow both your plants and your wealth. The financial experts call it the time value of money. Gardeners and farmers often refer to it as summer! This is the time to pay close attention to your field or garden plot. There might be worms or insects; you may need to pull a few weeds. In real estate investing, we maintain our properties, and occasionally deal with problem tenants. It’s all part of this season of the investing process.
And finally, it’s harvest season! There is more work to be done here, and the timing can be very important. Many dedicated gardeners will enjoy the fruits/veggies/flowers—but will also be planning for the next season at the same time. In the financial world, this might be estate planning for the next generation, or simply watching the real estate cycle to sell some properties when the time is right.
Just like you don’t expect your garden to miraculously give you fresh tomatoes tomorrow, we shouldn’t be expecting our investments to give us complete financial freedom the day after we sign those mortgage papers. Time and energy will be needed to watch your crop mature through the seasons. Many investors in Calgary and Alberta today are recognizing a fabulous planting season; we are at near ideal conditions to set down some roots for our Buy and Hold “plants.” Then with time and close attention to the details, we will nurture a wonderful bounty when harvest season comes along.
