Here are three vital real estate lessons you should teach your kids.
In my book “50 Things Your Real Estate Agent Should Tell You But Probably Won’t,” Chapter 24 outlines three vital lessons you should teach your kids about real estate. Today I’m joined by my father L.A Johnson to share these lessons with you.
The first lesson is about ownership—more specifically, the difference between renting and owning. Right out of college, I told my father I wanted to get an apartment. He said that was OK, but I couldn’t stay there long. “Listen, man,” he said, “you have to own the building you’re living in.” And that’s what I eventually did.
At 1:13 in the video, you can see me read an excerpt from the book that attributes my success to my mother and father and describes their influence on me. It also delves further into this first lesson. As I say in the book, you should let your kids ask questions about the difference between renting and owning, and make sure you’re prepared to answer them.
The second lesson the excerpt mentions is the power of investing. Years ago, my wife and I decided to buy a home for each of our daughters to pay for their college education. Once they graduate from high school, we plan on selling the homes and using their appreciation as their college fund. We’ve shown these homes to our daughters and told them why we bought them. It teaches them that we’re willing to invest in them.
The third lesson is the work that goes into investment properties. I drive by work sites all the time with my kids to show them the work that goes into real estate investments. I also want them to know that what you see on TV isn’t what happens in real life, and you can’t collect an investment check without putting in the work first.
Teaching my kids these lessons means they’re ready to implement them before they go off to college. For my college graduation, my father gave me $5,000, but he told me I couldn’t use that money until I was ready to buy a home. This not only gave me a sum I could put toward a home purchase, but it also let me know that my parents would help me through the process. I bought a foreclosed home back in 2001, and I had to attend four settlements to do it. My parents were there for each one. They didn’t say much, but it was important to have someone there with me.
So many kids only need someone to show them the journey; they can figure the rest out themselves. Show your kids all parts of the investment journey—not just the fun part. Show them the meeting with the contractors, the house cleaning, etc. If you show them everything, they’ll be prepared for everything when it comes to real estate investment.
If your wish is to have your kids attend a four-year college, my father’s advice is to buy a property now. That’s what he would do if he could do it all over again. By the time they graduate, the value of the property will increase, and you can either live in that property or sell it.
If you want to buy a property in your kids’ college town or have any questions about today’s topic, don’t hesitate to call or email me. I’d love to help you. Remember—you have the dream, we have the address.
