So you see that’s the one end of a good approach of real estate investment, right? The other end is,the wait and see approach, the other end is when you say, I’m going to nice to see you number, I am going to get into this real estate investment and I am going to then wait and see, so I’m going to buy my land. I’m going to stand, I’m going to buy, applaud, whatever you call it in whichever country. And then I’m going to wait and see if this laundry accruing value. I’m going to wait and see if maybe something comes up around buy property that’s going to make it more, you know, but easier to actually like get something out of. But either way, both of these are a wait and see approach and not helping you guys. They’re not helping you because number one, you just let a perfectly good investment pass you by it.
Or number two, you’ve got into an investment and it’s eating up your money and not giving you back anything in return. So why? Why would he ever do that? Do you buy a car and then go and pack it in your ground and say, this is cool. I got that comment, I got it, you know, and then you’re like sitting there and you’re enjoying the you during you enjoying having the car. This is the same with our real estate investments. We don’t just violent and then we’re waiting. We’re waiting to see. We, we move into monetizing them and this one we have found the people that are getting the best results. You guys, they are adopting a pro-active approach. Okay. They are moving forward and saying, you know what, I see this investment, I’m going to get into it. I’m going to take it all the way till it starts bringing me back money.
And the way it brings you back money will depend. It’s like, is it going to bring you back money through rental income isn’t going to bring you back money through agricultural income, you know like you know, using greenhouses and the like, is it going to bring you money through leasing it to people who want to use it for various purposes? Whichever way it is we often see is pretty much it was the person that you could ever use. Okay. So that’s the number one approach that I’m thinking is it’s really literally one of the West that you could ever employ. And don’t do it. Just don’t do it, don’t do it. What’s a better approach? And we’re going to talk about it. We’re going to talk about it in a second because I know and, and let me know, give me some hearts if this, if this really resonates with you that, you’re right.
I’ve fallen into this trap. We do it so often. It’s so natural because we don’t want to move, we don’t want to take action. We want to kind of sit and wait for things to come to us. And that approach just doesn’t work. I’m going to go into the next mistake that people make when it comes to the real estate investment and I’m just going to call this one, you know, playing it by ear or guesswork, so to speak, going, gotten, playing it by ear is more of you’re getting into something, but you have no idea if this will actually give you returns because you’ve not run the numbers because you’ve not analyzed it because you, you, you actually haven’t sought to find out. Okay? So if I put this amount of money into my investment, I will get back this amount.
So I’m going to get back this amount. So you’re not, you’ve not run the numbers, you’re not how I try to figure out. So yes, I’m putting this in and then when I do this kind of work, this is what I’m going to get out. But you’re just kind of approaching like using like a kind of a play by ear approach or you’re, you’re kind of, you know, relying on guesswork. This is this, this is not what the top real estate investors do. Ask just, I’m just gonna you know, laid out for you guys, but this is not what the top real estate investors do. Because guess what will never get you into. I mean, do you start a business without a business plan? Even if you don’t have a business plan, don’t you stop the business kind of with an idea of what it is you want to get out of that business.
Don’t you have an idea of this is the product I’m going to sell. This is where, who I’m going to sell it to. In fact, this is who leads that product. You know, this is exactly what it is, Because I’m like, I hope that the, the audience coming through is fine. If not, just do let me know. So, so you’re not. You don’t start a business without having all these little, all these tenants in place. Do you? So why do the same for real estate? Well, I get in when you have no idea how you’re gonna monetize it when you have no idea if it’s even going to bring your returns. You know what I mean? One thing I have found is before you get into, into a real estate investment, it’s very, it’s very important that you, you actually figure out who you need to know, what is that investment going to give you back?
What is, what is going to give you in return. Like it’s basically doing analysis. Okay. Is doing analysis to know what is the market rate, what are you going to buy it for, what kinds of you they’re going to get, what kind of, what can you expect for your, for your daily rental rate? How, how, how, how, what’s the occupancy that you can expect? Awesome. Thanks so much. So what can you expect with regards to, you know, how often it will be rented out, therefore, you know, how often you, what, what can you, what can you put as an average expense? No, no, not an average income per month. And therefore, of course, you know conversely, what is, what will be your average expense per month? You know what, what our ministries are you going to provide? You know what if it’s. If you’re getting into the short, short term rental market and this is a, you know that this is how we do our own high yield real estate investment.
What are the different things that you’re going to offer so you can just jump right into this without analyzing it simply because it’s it. It’s not a wise move. It’s not always low. Sure, sure you can. You can play by ear, but you’re simply just not going to get the best results. You know why? Because the time that you make your real estate returns, the time that you actually determine whether you’re going to be making real estate returns is before you invest in the property, not after. Do you know if before you invest in it and you run the numbers and they’re not making sense, that’s the time you actually will know this will give me a return or not, and you then choose to proceed or not. And if you choose to proceed, you did it knowing that, okay, I’m not really going for it.
I’m going for the feeling of owning this house. I’m going for the fact that this is finally my dream property. Never mind if it’s not giving me back the return that I really designed for it to give me. Okay? So you must run your numbers. You must know what return will I get on my investment. People get into investments all the time and you might know the, the, the term rental yield. I find this is a very useful way to kind of compare the kind of return on investment on a property rental unit is basically the annual income you can expect to get from a property divided by the value of the property. So it basically tells you in a nutshell how many years will you take to really pay off this property? So if you’re going either rental yield is maybe 30 percent, which means every year you’re making back 80 percent of the property value.
It’ll take you three years, slightly more than three years, slightly over three years, less than three years. And a half to make back the full value of your property, have factors held constant, you know, we’re not counting the cost of financing or accounting, all other costs associated with just looking at what is really your return on investment for this particular property. That’s just an example of some of the numbers you want to run. And obviously you want to look around at the market. You want to look around at what it is that you can find through the market. Well for some reason, I just got an area, but that’s fine. You want to find what kind of return on investment you can get through the local market. And you know, by doing that research, you know, and maybe you don’t know how to do it well nevermind.
We’re going to talk about it in a second and I’m going to tell you exactly how you can do that kind of research so that you can be able to really get yourself the best possible a property. Because let me tell you why this is important. I mean, a lot of people want ask. It’s a number, it’s a number two question. I would say that a lot of people ask us is, how can I know that the property I’m investing in is the best one? How can I know that this property that I’m investing in is the one that will give me the best returns? How can I know? You know? And if a question that a lot of people ask and so that’s why I’m like, why would you can go ahead and do this by guesswork? You guys? I’m like, I don’t, I don’t understand it.
I’m here today. I’m here to talk in love. By the way, I’m putting it up because I’m like, why would we do it is because I’ve seen too many people doing it then really shouldn’t be. So I don’t want you to fall in that same trap. That’s why I’m talking to you like I’m talking to you like a big sister. Okay. We’re keeping it real. I’m, I’m telling you like it is. Okay guys, so super, super good to hear. And what do you think about this thing so far? Does this resonate with you? Have you kind of taken that approach, maybe taking a wait and see approach in your property investments maybe, you’ve either been wait and see on the outside of the investment or on the inside of investment. And how’s that working for you so far? How’s that working for you? Tell me the comments.