What to Do When Your Spouse Won't Let You Invest in Real Estate
You've read everything about investing that has ever been published. You've gone to seminars, read blogs... you've even gone to investor meetings.
But, your spouse isn't really excited about spending your entire life savings on a 'pipe-dream'.
Can you really blame them - would you do the same thing if they wanted to spend everything on their idea?
You may be so confident that you will succeed but your spouse isn't quite so confident. They really want you to succeed but the risks are so great that they think it's better to play it safe.
The reality is that most of the time the more conservative of the two people wins these arguments about spending. Some people just prefer the money to be safe, even if it may be stuck in low returning investments.
How Can I Convince My Spouse to Invest in Real Estate?
I've spoken with countless potential investors who love real estate and want to invest, but tell me their spouse just won't let them do it, or they are "still working on" their husband or wife to convince them.
I've been there too, so don't despair; It's healthy for your spouse to have some skepticism. If you're enamored by an idea, it's good that your partner grounds you in reality - real estate is not all rainbows and unicorns.
But, you can't let them hold your investments back. Being safe won't let you retire young or retire wealthy. You need some risk... but you need to show your spouse that you will manage the risks while still getting the returns.
Here are the 5 things you can do to help bring them around to your point of view:
- Expose Them To Real Estate Investing
- Prove Your Knowledge Of Investments
- Re-Frame It As Earning More Income Instead Of Spending Money
- Start Small On Mutually Agreeable Investments
- Last Resort Option: Create A Side Hustle And Save Your Own Money
Expose Them to Real Estate Investing
People naturally fear what they don't know - so you need to expose them it. Over time their knowledge will break down their fears.
So, the question is: how do you expose your uninterested spouse to real estate.
I got lucky - we wanted to buy a starter home and a multi-family property is just what made sense. When it came time to grow our investments, my wife already had a lot of exposure to our rental properties. She wasn't 100% on board with my plan, but she went with it because it wasn't a completely new concept.
There are other ways to expose your spouse to real estate:
- Take them to local investor meetings
- Have them read and learn about real estate
- Talk about the market with them a little over time
- Introduce them to other investors you've met who are making money
- Take them on showings of potential investments
- Show them a sample real estate investing business plan and ask them to tear it apart and find the problems
Prove Your Knowledge of Investments
For some reason, my wife will believe someone else that is half right before she believes me when I'm completely right. It's happened so many times that I would mention something I learned, or something I thought was a good idea to do, just to be brushed off. 4 or 5 months later a friend would mention the exact same thing and suddenly it's the best idea ever.
I'm not in any way talking bad about my wife; I'm pointing out that people are naturally skeptical, even of their husband or wife. Skepticism kept people alive for thousands of years, so it's natural.
Your spouse probably doesn't believe that you know what you're talking about. Why should they? You're not a real estate expert yet (in their mind). I think this is a pretty universal problem - You have to know more than an expert before your spouse will ever believe you. Then you need to have someone else validate these facts before they finally accept that you know what you're talking about.
This is why you need to prove your real estate knowledge by having someone else validate its accuracy.
Talk to your spouse about real estate and show your knowledge...but expect them to just brush it off as more of your crazy ideas. Then, when you start to introduce them to investors you know, those investors will likely say some similar things as you've been saying for the last 6 months. Suddenly, your words have been validated by another person and you are more believable.
Make sure you know what you're talking about first and have an excellent investing plan.
Re-Frame the Conversation - earning more income instead of spending More
Most normal people look at investing as spending money. Hopefully some day they will see it back with interest, but for now it's gone.
Real estate investing is different. You will see that money disappear, but you will see rent come in every month after that.
So, unlike other investments which you never see, you can look at real estate investing as a way to earn extra cash. By reframing the conversation as a way to earn more money, your spouse may be more receptive to hearing about it.
Compare the following statements:
- "I want to spend $100,000 and buy this property. We're going to earn some rent and appreciation on it so it's a good investment."
- "This property is going to earn us an extra $1,000 per month. What do you think we should do with the extra money?"
In #1, the statement is focused on spending money with less emphasis on making money. #2 is focused entirely on making money (here is a cash return calculator to help you estimate how much you'll earn). Though it's the same investment in both examples, by framing the conversation in different terms, you will elicit a different reaction.
Start Small on Mutually Agreeable Investments
Sometimes it's possible to just start small and build up to bigger investments. You may not earn as much on the smaller investments, but once you show positive returns with related investments, your wife or husband may be more open to trying more aggressive investments.
Here are a few ways to test the waters instead of just diving in
- Start by investing indirectly through stocks or ETFs.
- Put a couple thousand into crowdfunding some real estate with Fundrise or another platform.
- Lend money to another investor you know. Good returns and less risk.
- Become a passive investor on a deal with a larger sum of money. You'll get cut in on the profits.
- Consider doing a live in home flip, (Aka "house-hacking"). You can make a lot of money, have a home to live in, and not worry as much about losing money. Mr. 1500 earned most of his wealth by house-hacking.
- Partner with someone more experienced - split the risk/reward.
Each item progresses a bit more down the path toward doing your own deals. Eventually you'll be buying your own deals.
My wife and I never thought about investing in real estate, but since we had already built up some experience on "home" then it was easier to move on to bigger deals.
Last Resort Option: Create a Side Hustle and Save Your Own Money
Alright, so you've tried everything and your spouse is just dead-set against it. What do you do?
Well, it's a last resort option but I've seen it done - work a side-job, get a side-hustle, or find some other way to make money. Then, invest with the extra money.
I wouldn't do it in secret of course, but your spouse will probably let this idea happen. If you are so motivated that you work extra just to find the money to invest without affecting your joint savings or investments, then there is very little he/she can use to reasonably disagree.
If you do this, I would highly recommend finding a side-hustle in a related field to real estate such as remodeling, real estate agent, appraiser, inspector, or something else. Once you have enough money saved to get started, you will also have some experience and contacts in the field.
Bonus: Really Last Resort Option - Hypnotize your spouse
How could they say no if you hypnotize them and make them agree? Obviously I'm just joking here.