As teachers, we often work in teams to create a comprehensive plan for covering our curriculum and getting a more complete picture of our students when they’re outside our classrooms. We celebrate our victories together, we help each other through challenging times, and we share the experience of teaching together.
A key goal of our real estate investment club is to help you overcome the obstacles to investing, and make you feel comfortable learning new financial skills. Building a team of like-minded investors, fellow teachers in this case, can help alleviate the challenges. By spreading both the risks and the benefits of investing, teams can help you get started quicker and easier.
Historically speaking, real estate investments generally outperform the stock market at returning a profit. But there are some challenges to entering the real estate market.
- Down Payments – While you can purchase your primary residence with little or no money down, most mortgage lenders require 20% down on an investment property.
- Active Management & Time Requirements – Investing in real estate requires more of your time and thought than stock purchases.
- Hiring Realtors, Property Managers, Legal, & Tax Experts – There’s a time and money cost to hiring and consulting with real estate experts.
- Maintenance & Tenant Acquisition Costs – In addition to your mortgage payments, your rental property needs to be properly maintained. There will be vacant months when the mortgage must still be paid.
- Market Fluctuations – We can predict that the market can be unpredictable. In 2008, we saw that investors overextended themselves and couldn’t make their mortgage payments. In 2020, we saw the temporary rental market (AirBNB and VRBO) collapsed while traditional long-term rentals continued relatively unscathed – but some tenants couldn’t pay their rent for a few months.
There is no requirement to build your own team. Some of you may already have your own real estate investments, or feel comfortable that you have the resources to start on your own. That’s fine.
If you are struggling with some or all of these challenges, we’d encourage you to find a mentor, or form a team with other like-minded investors who are also new to real estate to share the costs. There are legal and business structures available to enable your team to work together and protect your assets. You should always consult with a real estate lawyer before investing in real estate with or without a team. You will have the opportunity to meet real estate lawyers and other experts in the club meetings.
For more information about the Real Estate Investment Club for Teachers, please feel free to call, text, or email Robert Butler at any time: (512) 758-9134 or Robert@MrRoundRock.com.