In this post from the PhREI Network, Ian Cook talks about how when it comes to short term rentals, comparison is the death of joy.
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In real estate, as in life, there’s always a more successful investor who has more properties, more cash flow, and more critical acclaim. I try to look to these investors as inspirational figures, but it’s easy to start that dangerous game of comparison.
As I scroll through their social media posts, the voice in my head whispers, “Why aren’t I as cool as they are?”
Well today, Ian Cook addresses five ways that comparison can be the death of joy as it relates to investing in short term rentals. This has been on my mind especially lately since we purchased a Palm Springs vacation home. Though it’ll need some work, we hope it will eventually become a high end short term rental. As we research and look at other rentals and learn from other investors, it’s very easy to get bogged down by unhealthy comparison.
Ian makes some great points below about why comparison is often unproductive. Enjoy!
This post first appeared on Carpe Diem MD.
Comparison… What is it good for?
Absolutely nothing… if you ask Teddy Roosevelt and Mark Twain.
Teddy Roosevelt states “Comparison is the THIEF of joy” and Mark Twain takes it a step further with his famous quote “Comparison is the DEATH of joy”
We just returned from a great week in Yosemite National Park and Teddy Roosevelt was on my mind.
The story goes that after a visit to Yosemite with John Muir, Teddy Roosevelt agreed to include the Yosemite Valley and Mariposa Grove in the Yosemite National Park. This was accomplished via the Yosemite Recession Bill in 1906. (Prior to that the Yosemite Valley and Mariposa Grove were under California State Control and were not park of the Yosemite National Park which was founded in 1892). It was kinda of a big deal…. (To learn more click here)
So I digress…
I love both of these quotes and although we started with talking about Teddy, I feel that the Mark Twain quote holds more weight….
“Comparison is the DEATH of joy”
Why talk about this on a Physician Short-Term Rental Investing blog? Well, because comparison is inevitable in this form of investing and addressing the negatives associated with comparison is important.
The First Death of Joy by Comparison
COMPARING YOUR FINANCIAL STATUS TO THOSE ON SOCIAL MEDIA….
If you are reading this blog you are likely part of some sort of social media, Facebook, Instagram, Twitter etc. The same comparison bias that is prevalent on these sites about social lives occurs in the investing world.
In the Facebook investing groups you will see all the success stories, the fanciest properties, the best markets, Physicians retiring at 32 and you may feel like you are missing out… The truth is that people including Physician investors self-select to present their best stories to post on Facebook.
You are less likely to hear about the person who bought Bitcoin at the peak or purchased their entire real estate portfolio before the great recession and never recovered.
When it comes to Short-Term Rental property posts you are unlikely to see the average STR property… You know the one that looks decent, rents well and you enjoy. The posts will most likely be the large very impressive luxury homes that rent well.
The large luxury home that doesn’t rent isn’t mentioned; neither is the “frumpy” looking home that is a cashflowing machine.
Luxury STRs are great if you are in that financial class. But, that is not the only way to invest in Short-Term Rental properties.
You do not have to let the Physician lifestyle creep, or FOMO influence your STR investing.
With that said, if luxury STRs are your investing vehicle then be proud and continue on.
If middle tier properties are the safer entry point for you then go for it…
Post your property with pride and don’t worry about comparisons.
There are Short-Term Rental properties that fit every investor and clientele. The importance is to choose the investing category that works for you and avoid comparing to other Physician Short-Term Rental investors.
It is OK to own an average STR as a Physician…. It is also OK to own a Luxury STR. In fact, at some point you may have both…
The Second Death of Joy by Comparison
IS COMPARING YOUR RATE OF STR PORTFOLIO GROWTH.
Do not worry about the portfolio growth of others. Set your own goal to achieve in 3 years that aligns with your personal risk tolerance. You may seek others for inspiration but do not let another’s growth discourage you.
If your goal is to buy one property a year, great!!!
On the other hand, if you want to buy 4 a year then cool.
You are both doing great if you are working towards your goals… Neither is beating the other.
Do not let another’s lack of growth encourage you or someone’s rapid growth discourage you….
Your “Joy” with your STR progress should be self-determined.
The Third Death of Joy by Comparison
COMPARING DIFFERENT MARKETS.
Markets are inherently different. Comparing different markets is like comparing Apples to Oranges and will only result in frustration.
For example, comparing an 800k condo in Mammoth Lakes, CA or Aspen, CO to a beautiful HOME in the Smokey Mountains is just not fair. They are completely different markets….
Now, maybe that type of comparison will result in inspiration to try out of State investing but the comparison should not discourage you if your portfolio is located in a high cost of living area.
The Fourth Death of JOY by Comparison
COMPARING DESIGN AND AMENITIES IN SHORT-TERM RENTAL INVESTING.
Looking at other properties should be used solely as a source of motivation and inspiration when decorating. Every place is unique and different depending on your market and STR property category.
If you own a 500k property and your in-market comparison is to a 1 million dollar property then you may be setting yourself up for disappointment and potentially rehabbing/furnishing yourself out of a profitable property.
Compare your property to properties in your similar class and then design and furnish to the high end of that category to improve your bookings.
The Fifth Death of JOY by Comparison
Cashflow is market dependent and influenced by personal use. Again, this is based on your own personal goals.
If you buy a property and your personal use increases over the years then your cashflow will “decrease” but if your “JOY” increases than it is worth it.
Another investor may invest solely for cashflow and never use their properties for personal use. That is a perfectly sound strategy and will work for them.
No need to compare to each other, as these are completely different and equal strategies. These strategies are influenced by your investing syle.
To learn more about cashflow check out this post (The Short-Term Rental Cashflow Snowball)
Take the time to write out your 3-year goal and why you are trying to achieve this goal.
Do not waste time comparing your progress to others.
Stay positive and only use comparison for inspiration and motivation.
What do you think? Do you also suffer from the death of joy by comparison? Comment below and please subscribe to the weekly newsletter!
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