Gimme Shelter: Property Investing Meets Basic Needs

In hard times, basic needs become the most important. Food, personal safety and shelter dominate the thoughts of most people. That’s what forms the first level of psychologist Abraham Maslow’s hierarchy of human needs, which we’ve discussed in a previous post. Because the need for a safe place to live is at the center of those basic requirements, housing remains a commodity that never loses its value.

And because that’s true, opportunities for investing in rental real estate using Jason Hartman’s strategies can be found in many areas of the country. Investors following the 10 Commandments for Successful Investing find that Commandments Six and Seven speak to the importance of remaining open to investment possibilities anywhere.

The sixth of the 10 investor’s commandments, “Thou shalt diversify,” joins the seventh, “Thou shalt be Area Agnostic,” to express a key principle about investing in general, and in real estate in general. Diversifying – investing in as many properties as possible, in a variety of markets –reduces risk and maximizes return. This approach offers some protection against the economic ups and down of both local and national economies and saves investors from losing everything in one collapse.

Along with this, Jason Hartman’s term, “Area Agnostic” points out the best way to diversify. In the religious sense, an agnostic isn’t attached to a particular set of beliefs, preferring to keep an open mind about all possibilities. In real estate investing, an “area agnostic” remains open to opportunities everywhere, not just in the local area. This attitude of openness also applies to the advisor an investor chooses to work with.

Following the advice of Commandment Two, “Thou shalt have a professional investment counselor,” an investor needs to find a qualified individual – not a corporation or a brokerage — who can guide the investing process, so one factor in choosing that counselor is a willingness to be just as agnostic in terms of potential markets as the investor is. This avoids conflicts of interest and opens up more opportunities.

As Maslow observed in the early 1940s, shelter is a basic need of the human creature – one which, for most people, must be met before many others, The need for safe shelter is pre-eminent among the majority of people in the United States and similar countries, and those who can’t purchase shelter must rent it. Opportunities to provide that shelter can exist in any area, if investors and their advisors follow Jason Hartman’s recommendation to remain area agnostics, open to all possibilities for good investments in many different locations.

The American Monetary Association Team

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