This transcript was generated from the episode audio and may contain minor errors.
[Music]
Hey everybody, what's up? Chris Guillebeau here, your host of Side Hustle School. So excited to bring you a daily episode every single day for more than 1,400 days and counting. Thank you so much for joining me for the journey, whether you've been here from the beginning or if you just heard about it yesterday, as well as whatever path in life you're on, if you are an experienced entrepreneur, if you have never started any kind of business or never made money apart from your paycheck. Really, this whole project is about helping people in those situations, especially those with day jobs who are trying to diversify their income.
It's about helping people do exactly that. Now, historically, when people have talked about passive income or multiple streams of income, I'm sure you've heard those phrases, historically, they have referred to the practice of buying rental properties. And that's something I don't really specialize in. It's something I don't talk about very much here because I think people are familiar with that. And what I've tried to do with Side Hustle School is highlight many of the many, many different opportunities there are.
So if you haven't considered something different, my hope is you can listen to this story, even just a month's worth of archival episodes. They're very short, less than 10 minutes long on average, and get a whole bunch of different ideas for stuff that you never considered before. In this listener question, however, today's caller is interested in profiting from real estate. We've looked at this subject from time to time, considering the long-term effects of the global pandemic, here's the twist, might there be some new opportunities? So she'll explain that a bit more in her question, how to profit from a distorted real estate market.
That question and my answer is coming up after this message from our sponsor. [Music]
Hi, Chris, this is Kelly from Columbus, and I've been listening to the show for a while now. Thanks for the helpful advice. When the pandemic started, real estate sales in my area slowed way down, but only for a month or two. Then they started back up again, fueled by lower supply as more sellers kept their homes off the market.
Now, the overall market is way up, with housing prices at least five to 10% higher this year compared to the last. However, it's a very lopsided, distorted market. No one wants to buy condos or small spaces. Everyone wants big spaces further out of the city and anything with a backyard. Is there a way to profit from these changes?
[Music]
Hey Kelly, thanks so much for calling in. Good to hear from you. I've actually heard much the same thing about the real estate market. And of course, real estate markets vary quite a lot by location. The market in Brooklyn is gonna be completely different from the Birmingham, Alabama market.
And it's not just extreme comparisons like that, from city to city, state to state, province to province, et cetera. Lots and lots of variations. But generally speaking, in areas I'm familiar with, I've heard quite a bit the same thing as Kelly, how at the beginning of the pandemic, everything's slowed way down, but then it picked back up because of the difference in supply and demand and such. And for sale prices are actually up a lot of places, just not for condos or anything that's a small urban space. And that's fueled by a couple of concerns.
First of all, people are looking for backyards and outdoor spaces or anything that's larger than a small apartment. But also it's not just 'cause of safety concern, it's also because everybody is working from home, working from home and going to school at home. And even as we come out of the pandemic, hopefully, or at least transition to a new phase, I think more and more people are going to continue to be in those kinds of environments. So that's why people are looking for larger spaces. Now, inside us a life, I think it's important, not just with real estate, because let's make this broader.
You always wanna look at what people are missing or not paying attention to. If you do want to be a real estate investor in a traditional sense and snap up some properties for future rentals, maybe this is a good time to acquire some of those condos, if you're thinking five to seven years out or whatever. But I would say also use this time to make sure your house is in order, like your own house, no pun intended there. Make sure you have a good credit score. Make sure you have your emergency fund, three to six months worth of expenses.
Pay off any debt that you can, or if you can't pay it off, try to consolidate it to low interest debt. So you're at least not going further and further behind. And then perhaps most important of all, before you invest in real estate, consider other options. As I said in the beginning, there's so many other things you can do. I think having a diversified real estate portfolio, like people always talk about, I think that's a noble goal.
It's not that I think it's bad, it's just like so many other options, as I said. It also requires you to have significant assets in the first place. So if you're not there yet, defer that goal and work on something else. And don't be discouraged because first of all, all those other options. And second, remember that a lot of those other real estate investors are not necessarily doing that well.
You always hear these success stories about them, but there's a lot of people who get into this and have trouble, whether it's with renovation or finding renters or just realizing that the whole thing is much more of a hassle. So keep all those things in mind and look at what people are missing or not paying attention to. Listeners, if you have a question or a comment or an update of your own, come to sidehustleschool.com/questions. We're gonna continue to feature them. It's one of my favorite things to hear what you're up to.
I hope you'll continue to join me. The show comes out every single morning, seven days a week. My name is Chris Guillebeau. This is "Side Hustle School." [Music]
- From the Onward Project.
