You don't deserve to own real-estate until...

“You don’t deserve to own real-estate until you have the money to hold real-estate.”
Or something to that effect. Has anyone ever heard this phrase used before? What does everybody think about it?


I’ve never heard anything like that before.

I think that “deserve” is a very odd word to use in conjunction with owning real estate. Like there is some sort of merit system involved with who can own real estate and who can’t.

It’s just simple math that if you don’t have enough money to pay the holding costs of owning real estate, you aren’t going to own that real estate very long.

But let me point out that there are a lot of people who don’t have enough money to pay holding costs who are none-the-less doing real estate for a living. Thye just do a type of real estate where they don’t hold very long.

This rule makes perfect sense to me. Let’s change the phrasing just a little and maybe it will be clearer for you too.

Don’t own real-estate until you have the money to hold real-estate.

What if we restated the rule to say: If you can’t afford to own a property, don’t buy it

There are many posts on this very site that admonish beginning investors not to take ownership of property unless they have sufficient cash reserves, cash flow, or discretionary income to pay the holding costs until the property is sold.

This rule applies to any property you may be considering for purchase, whether that property is your primary residence, a vacation home, or an investment property.

This rule applies even if your exit strategy is to flip the property. Exit strategies don’t always work as we hope. Sometimes the flip takes longer than we expect. Sometimes the flip doesn’t happen and you have to turn the property into a rental.