I’ve had a couple of writing assignments recently on money management issues and real estate investment strategies. A lot of the research and writing I’ve done seemed to be particularly relevant to a conversation this morning with a friend of mine – a salesman who is currently working for an energy company, persuading businesses and residents to switch their electric to a cheaper rate.
The conversation this morning, though, was about a gas station owner somewhere out here in PA. From what I gather, a couple has managed to buy a gas station but is now struggling to get the thing up and running.
It’s a situation that raises a couple of issues from this property and money management perspective. First, I think it’s fair to say that most people still look to real estate as the golden ticket to wealth creation. After all, everyone needs a place to live or operate a business. Real estate is one of those assets that, in the long-run, retains its value if you’re even halfway diligent about managing it. Second, though, I think the money management issue definitely comes into play. As the recent economic problems have shown in this country, not everyone is ready to own real estate. Not everyone who has gone out and bought a house was actually financially ready to do so.
Particularly if you are buying a commercial property, such as a gas station, you have to at least have positive cash flow owning the thing. If all you can do is pay the mortgage, if you can’t do any maintenance, if you can’t afford the operating costs (for a business or a home), then owning probably isn’t what you should be doing(!) At least, that’s what I’ve seen and what I’ve found to be confirmed in the research I have done, both on real estate and money management.
