In the early stages of parenting, your goal is simple: Keep them alive. You feed them, change them, bathe them, provide a place to sleep, and make sure they don’t stick their fingers in light sockets or run out in front of moving cars.
Simple in theory, yes, but challenging in execution. As your children grow up and pass through childhood, adolescence, and early adulthood, your mission becomes less about helping them survive and more about giving them opportunities to thrive.
Your focus shift toward preparing your kids to be functioning members of society who create (and enjoy) some degree of personal and professional success. When you’re a real estate investor, one of the greatest gifts you can give your children is a hands-on education in the art of real estate investing.
Five Tips for Teaching Your Kids About Real Estate Investing
It’s never too early to start teaching children about real estate investing. A young one might not grasp the big picture, but he or she can probably understand key micro-level concepts.
Once a youngster reaches a certain age, he or she will begin to put the pieces together and comprehend everything else. You’ll have to tailor the training toward the appropriate age and interests of your child, but here are five tips that should prove helpful:
1. Begin With Savings
If you spend enough time lurking on message boards and gimmicky real estate investing podcasts, you’ll hear people talk about zero-down real estate investing. Although these aren’t inherently illegitimate techniques, they are definitely aren’t practical for most people.
In order to get involved in real estate investing, you’re almost always going to have to fork over some of your own funds. So in order to teach a child about real estate investing, you’re going to want start with savings.
Children have to understand that money can be a scarce resource and they must tell it where to go if they want it to work for them. Find an age-appropriate way to discuss savings with your child; an effective approach is to use the bucket method.
Each time your child gets an allowance or paycheck, encourage him or her to divide it up among four categories: giving, saving, investing, and spending. Using this as a visual representation, you can teach your son or daughter about the role that saving and investing play in building a real estate portfolio over time.
2. Make it Rewarding
Would you invest in real estate if you didn’t make a profit? You probably wouldn’t. So why would you expect your child to get excited to learn about real estate investing if there’s nothing immediately in it for them?
They’re liable to lack sufficient perspective to grasp that you’re preparing them for the future. So if you want to keep your kids excited about the prospects of real estate investing, make the learning process rewarding for them.
Give them a small percentage of your monthly profits. Offer to take them out for ice cream at the end of a busy week. Let them make some decisions. Find something that motivates them now and go with it.
3. Use it to Explain Budgeting
Most children graduate from high school — and even college — without any understanding of how to budget their money. Then we thrust them into the world where they draw a paycheck and have monthly expenses, so why should we be surprised when they make dumb decisions with their money?
Owning rental properties provides you with an excellent real-world teaching opportunity to show your kids how to budget and explain what it looks like to measure income against expenses and plan for positive cash flow.
4. Teach Them to do the Dirty Work
Too many teenagers and young adults today have coasted by without ever having to do anything terribly difficult. Their parents might have thought they were helping their kids by protecting them from difficulties and risk, but there’s a good chance they’ve done them a disservice instead.
In addition to helping your kids understand the business side of real estate investing, you also should make sure they know that the activity can involve physical, hands-on challenges. Bring your kids along for the gritty components of the job: fixing toilets, ripping up carpet, mowing lawns, etc.
They’ll be much better prepared for a career in real estate (as well as life in general) if you do.
5. Bring Them Along
The best thing you can do for your kids in terms of providing a real estate education is to spend time with them. Bring them along when you’re working, rather than build a clean line of separation between your professional and personal life.
Your kids will learn more from sitting in the car and listening to you talk on the phone with business partners, tenants, and contractors. Put the phone on speaker and let them listen to how you handle various situations (although make sure they understand not to talk while you’re on the line with other folks!).
An inquisitive child will ask questions about the conversation after you’ve hung up. A more reserved child will at least soak it up.
When your children reach an age when they can be accorded a little more responsibility, bring them along when you visit different properties and ask them to take notes or perform certain easy tasks. Not only will this make them feel important, but it should teach them some hands-on skills that are best learned through firsthand experience.
As kids grow even older, you might assign them specific missions without your direct supervision. Whether it’s collecting rent checks from tenants, responding to a maintenance call, or driving by a property to inspect something, unsupervised duties can foster significant growth.
Green Residential: A Family Business
Green Residential was established decades ago as a family-owned and -operated business. More than 30 years later, the firm is still humming along very much in the family.
We’ve grown over time, though. We’re no longer a small agency trying to feel our way through a complicated industry. We’re now acknowledged as the premier property management company in the entire Houston area.
If you’re looking for a business that cares about family, communities, and turning a profit, look no further. We’re here to help … and would love to develop a professional relationship with your family. Contact us today!