I played Monopoly tonight for the first time in years – and lost big. What gets me is that I could have won, if I would have applied a few rules that I learned in the real estate market the past few years.
1. Buy low – and develop the hell out of it.
Vermont and Connecticut avenues (the light blue properties) that my husband bought on didn’t seem like much – until he had three houses on them. Suddenly an investment of $100 was returning $300 a pop.
Likewise, it’s easy to discount homes in areas that are less desirable. I didn’t buy in Philadelphia’s Graduate Hospital neighborhood in 2003 because it wasn’t quite developed enough. Luckily, my husband had a hgiher tolerance for drug dealers than I did – and we ended up making a profit when we sold.
2. High priced properties are riskier than they appear
Sure, I had Park Place and Boardwalk tonight, along with the green stretch of Pennsylvania, North Carolina and Pacific avenues. But buying homes there cost more than other areas of the board, so I ended up with less for my money, with equity that was nearly impossible to access. Good to remember in DC’s (still) overpriced real estate market.
3. Debt is why you lose – so keep plenty of cash on hand.
In the middle of the game, I seemed the sure winner, as I owned more properties, including the prestigious higher end Boardwalk/Park Place, three railroads and a utility. But I ended up losing, with most of my properties mortaged and the others in hock to the bank. That’s mostly because I didn’t have an appropriate cash cushion on hand. We support our Philadelphia investment property with a hunk of easily available cash – just in case. Because you never know.
I could go on and on – but I’d rather that you did. Any other lessons that we can learn from Monopoly? Or other board games? Tell me below.