For years, I was working towards my own startup. I always had various side-projects and learned a lot from these side-projects. But at the same time, all these projects were failures.
I never paid much attention to real estate investing. I had some friends who bought rental properties or got into flipping houses. It seemed so much more work and riskier. I can create a new startup for just a few dollars and a few weeks of my time, so why pay attention to real estate.
Now 15 years later, I see some of those friends have 10s of such properties. They are probably not making enough money from those properties to quit their day jobs yet. But in a few years when their mortgages are paid off, they can start getting nice rental income.
On the other hand, most of my friends were working on side-projects and none of us have anything to show for it. We all are very dependent on our day jobs. Some of us have 401Ks but not enough to retire on it anytime soon.
These observations led me to think about real estate. After thinking about this for a while, I am thinking at this stage in my life, I should get into real estate investing. Here are some of pros and cons of real estate and startups.
Real Estate#
Pros:
- Leverage. It adds risk but let’s say the value of your rental property goes down, you will still charge rent.
- Physical labor. Some people may consider it negative but as a programmer who spends 8 hours sitting at a desk, I cherish physical activities right now. It should be fun to fix some stuff.
- Discovering your city. Ever since I started to think about real estate, I have been driving to new neighborhoods to check them out. We usually stop by parks in the neighborhood. Have a fun family outing.
- And that brings me to the most important pro of real estate, you can spend time with your family. Finding houses and fixing them could be fun family activities. Since becoming a father, this is how I think about everything.
Cons:
- It is possible that you may not be able to charge enough rent to cover your expenses. If the economy really crashes and then you cannot find a renter would be really bad.
- Bad tenants.
Startups#
Pros:
- Start a company with remote first ideology so that you can work from anywhere.
- Rewards are huge.
- If nothing else, you learn skills that you can apply at your day job.
Cons:
- Really hard to focus after day job on another programming project.
- Takes a lot more time commitment. Although I can work from home, mentally I will have to focus on projects. So cannot really engage with my son.
- Chances of success are a lot lower even if you build a great product.
