If you’ve ever played Monopoly you’ll know just how much of a frustrating and brilliant game it can be. There is a definite technique to the game, but some people can apparently play it with no tactics whatsoever and still appear to do well until the very end. Monopoly is eerily similar to being a property investor, and there are many lessons that you can learn through playing. Here are a few of the most important lessons to be learned:
You Need to Take Risks
If you don’t take risks in Monopoly then you will never win anything; the same is true with property development. You need to be willing to take risks in order to get bigger pay-outs and set up a strong property portfolio. While you can still achieve a good return on your investment through low-risk properties, the greater the risk, the more return you are likely to experience.
Cash Flow is Vital
Running out of cash in Monopoly spells game over. You could do a few sketchy deals in Monopoly, like trading your ‘Jail Free’ card for some much needed cash or selling one of your properties, but this will only see you through a few more moves. Monopoly doesn’t have the luxury of having commercial finance brokers to help you find cash for those sought after spots on the board, but it does teach you that you need to keep an eye on your money.
The same applies to property development: you need to know where your money is going and monitor just how much is being spent if you want to maximise your profit.
Go Big or Go Home
In Monopoly it’s the Boardwalk properties that bring you in the most money, but they also cost the most to buy. The same is true in real life. If you want to make a big return then you need to be willing to invest more money, it’s as simple as that. You need to think long term when investing in property, figuring out which areas are going to give you the best returns and be prepared to pay a little more initially for a greater profit in the long term.
Be Prepared to Negotiate
Unless you’re playing Monopoly with your family, there will come a time when you will be asked to negotiate trades and try to convince people to lower the price of their properties so you can snap them up. This is a skill that is greatly needed in property development as you will need to negotiate everything from the price of the property to getting the best quote from tradesmen.
Playing with Others
Playing Monopoly on your own is nearly impossible, and even if you did manage it, the game would be incredibly boring as there is no real way of winning. The same is true of property development, as you can’t take on everything by yourself and even if you could it would cost you a lot more time and money than it would if the work was shared. Learning to play well with others is an essential life skill, and forming bonds with the other players – builders, architects, electricians etc. – can help you to get everything done to the highest standard with the lowest costs.
Are you currently stepping into the property development game? Get in touch to discuss options for financing your project.
