It’s a very basic human trait. It happens all over the world, and people have been doing it since time immortal. Comparing ourselves against how we perceive our neighbors, coworkers, family, and friends is the inevitable result of striving to get ahead in this world. For the last decade, American’s have increasingly relied on credit to ensure that their house was just as big as the one next door.
Unfortunately, as we’ve seen over the last few years, this trend has come back to bite many of us where it hurts most; our checkbooks. The Huffington post estimates that nearly half of America are liquid asset poor, and many might not even realize it. Too many of us now live at a barely sustainable level that leaves us vulnerable to a single financial blow such as a medical emergency.
Savvy real estate investors need to understand this all too familiar condition and keep it foremost in their mind. Making sure that you can afford to sit on a purchase for longer than you mind be comfortable with is difference between turning a profit and panic selling to recoup a small percentage of your investment.
Also important is to avoid as much as possible is putting your home up against the others in your neighborhood in direct competition. Every house has its plusses and negatives, and focusing too much on ensuring that yours has a, for example, a bigger garage then whoever is next door can lead you to throwing money at a problem that’s not really a problem.
It’s impossible to predict what priorities potential buyers are going to consider when looking for a home. True pros understand that buying and selling real estate involves hitting the same checklist every time. Basic repairs and upgrades are almost always the same basic thing for every property. Keep yourself impartial when deciding what work needs to be done and remember that this is a business, and the point of any business is to make money, period. It can be satisfying truly impart your “vision” of what the best house on the street should be, but it’s rarely worth all the time and money.
At the end of the day, the same competitive drive that makes us want to keep abreast with everyone around us is the same that compels us to work hard and earn what it takes to do so. It’s not a bad thing, but it can be an expensive and potentially wasteful attitude if not kept in check. Investing means playing it smart to keep your money flow going. Mr. Jones might have greener grass, but just remember that he probably thinks you have nicer bushes.