So over this past weekend I went to Target looking for the Monopoly board game. Target carries the game in a beautiful wooden box. This is exclusive only to Target along with all the other classic board games we grew up with. The box fits like a big dictionary in your library bookcase and looks very regal beagle!
Now for your information I have not played Monopoly since I was like, sheesh, 10 years old. I remember playing it with friends and family. Board games seemed to bring the evil out of everyone I knew. Matter of fact I think when I hire a new agent I will challenge them to a game of Monopoly. I will study them to see how they are under pressure, along when things are going good or bad.
The ironic thing about Monopoly is that it was conceived during the Great Depression and I end up buying it during the Great Recession.
The Adventure Begins
So I purchase it, bring it home, tear open the box and dig into those rules immediately. I was determined to know those darn rules that everyone in my life had to bend and twist to their advantage. Now, because I was a kid and didn’t like confrontation I would just let things slide, but now that it’s 2010, I’ll be dammed if someone wants to invent some new rules while playing Monopoly with me.
So I got the rules down pat and set up the board; after a few rolls of the dice, we started. We began to cruise around the board and I started to purchase deeds to properties. I started to build my empire along with some railroad companies and some utility companies; I was feeling good.
It wasn’t until I started buying houses to place on my properties that the investment fire kindled.
About the 3rd run around the board I got a chance to purchase Park Place and Boardwalk. On future runs around the board I built up my houses and ended up bankrupting my opponent because the rents were so dam high! This was in 1935 rents, too. Imagine a Monopoly game adjusted to inflation . . . I wouldn’t even want to know what the rents would be today . . .
So after a few hours of playing, I had won my first game of Monopoly as an adult! I was ecstatic. I almost thought I had an unfair advantage because I have a real estate license, but the rules are there for everyone to follow, license or not.
While playing the game I couldn’t help but compare the game of Monopoly to the real game of real estate investing. The following are a few things that came to my mind.
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Some Monopoly Concepts That Can Help You in Real Estate Investing
- Learn the rules to the game of real life real estate investing. Learn all you can! Read all you can. The more you know the more advantages you have over the other guy who just knows a few things. Knowing and memorizing the rules helps you to build strategy and also helps you see opportunities others don’t see. Becoming a member of BiggerPockets does not hurt either.
- Buy as much as you can safely afford! Purchase as many properties as you can within the next couple of years because once inflation hits you will be sitting pretty, as interest rates will be sky high. Like in Monopoly you should buy as many properties as you can in the beginning to set yourself up to build houses on your property and collect those high rents. Don’t purchase too much too soon or you won’t have money for rainy days and unexpected bills which will send you packing.
- Manage your money and budget. Purchase things that will bring you a great return and not just a good time for the moment. In the game it’s better to purchase the railroads instead of the utilities because you can garner bigger rents when other players land on them.
- Bankruptcy should be used as a last resort – Back in the day going bankrupt was used as a last resort. Nowadays people use bankruptcy as a financial planning tool. In the game, bankruptcy means you are out for good. Be careful in life and only use it as a very, very last resort.
- Stay within the LAW – Plain and simple, follow the law and everything will be alright. Use all the forms your state requires. When in doubt disclose disclose and disclose. Don’t Go To Jail like in the game. Otherwise it’s gonna cost you bucks
- Location, Location, Location – Wait, did I say location? YES, I did. When you start off investing in properties to hold long term, try to purchase in good stable areas that hold their value even during great recessions like the one we are slowly coming out of. In the game of Monopoly you might feel cool because you own both Baltic Ave and Mediterranean Ave, but in the end owning those two streets won’t bankrupt very many players, unless of course, they were already about to go bust anyway.
I’m sure there are many other things you can learn from playing the game of Monopoly. Help me out and let me know if I missed a few.
Good luck in all you!
PS. When you play make sure the dog doesn’t get a hold of one of your properties otherwise it will get chewed on and then you will have some distressed properties up in your game. I speak from experience!