The Art & Science of Successful Real Estate Investing

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Our story starts on a beachfront lot south of San Juan del Sur fringed with palm trees. Directly in front of the lot is a sandy beach leading down to the blue waters of the Pacific.

Standing on the beach is a couple, their real estate agent and a charismatic property developer. They’re all gathered to discuss the lot, which is the last one available in the current phase. The developer pours the couple another rum drink and puts a freshly caught fish on the grill.

The husband takes a deep breath and says he doesn’t want to feel like he is being rushed to make a decision. He doesn’t want to make a decision based on emotion. He wants to make a logical financial decision.

No chance.

Even if the husband thinks he is making an analytical and measured decision, in reality his brain is following orders from his heart.

Head First Investing vs. Heart First Investing

Here’s another scenario:

Have you ever walked into a property that looks great on paper, only to realize something is missing? You can’t quite put your finger on it, but something is not quite right.

You’ve run the numbers, visited the property at different times of the day and even checked out local occupancy rates. The math works, but you just can’t get rid of that niggling feeling that something is wrong.

Is what you “feel” about a place important?  Or should you leave the emotional stuff behind and think like a hard-nosed property investor in order to maximize profit?

The answer to both those questions is “Yes.”

It’s too simple to say that if you’re buying your dream lifestyle property you need to engage your heart. Or that if you’re an apostle of the quick flip, it’s your noggin that’s needed most.

The best real estate decisions almost always involve both science (making sure the numbers check out) and art (trusting the heart on the softer, more intangible aspects of the deal). Talk to successful property investors and you’ll find that their experience bears this out.

It takes discipline while you are out on a property viewing to analyze both the “soft stuff” and the “hard stuff.” But when we manage to look at a property through these different lenses, we start to get better at the art and science of successful real estate investing.

What do you think? What’s your experience with heart first/head first investing?

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