Don’t be scared off by the headlines of the last few years - real estate is still a crucial component of any strategy to build major wealth.
That said, it isn’t a fast proposition. You must make sure that you are on board for the long haul and that you have the temperament to invest some time, money, and sweat equity in some cases, for gains that are sometime down the road.
There are very different roads to take depending on what your timeline and risk tolerance is. You can get rich much faster by using internet content, creating online products and infrastructure – but there is more uncertainty of success and more need for originality. Long term strategies are often tried and true, but they simply take a longer time to bear fruit. Prime examples are income stocks, exchange traded funds (ETFs), and of course, real estate.
The way to begin to increase your net worth via this method is to buy real estate with your earnings from your work, business, or other income sources. It may seem like a risky proposition when you are starting out, which is what scares many away from taking full advantage of the power of real estate. It is key to remember that real estate can provide an ongoing source of income – and most importantly, a passive source down the road.
Again, far too many of are concerned about the notion of “hard work”. It can take sweat and effort to get in the game in any arena – but ideally you will transition to a stage in which your money works for you, instead of the other way around. Your money can grow at an exponentially faster rate through the power of the market and the leverage you get when buying a property with a small down payment compared to its price, as opposed to what you would be able to achieve on your own solely by hustling.
Real estate investments that appreciate over time can provide you with ongoing cash flow to serve as the base for your financial portfolio. You may find that this leg of your financial picture serves as your primary safety net carrying you into retirement - or a period of financial independence if you prefer that term for being liberated from the need to report to someone else to earn a salary.
The key here is to be strategic about what properties you pick up for your portfolio. Do your homework in advance and be sure to only buy properties that either carry themselves or that can maintain a positive cash flow for you. At the point when you hold five to twenty properties that are all in positive cash flow, you can then be assured of a minimum floor for your income each year. This will enable you to maintain the lifestyle you have imagined for yourself.
You don’t need to be Donald Trump to obtain the capacity to build up your own holdings in the real estate world. You just need to do some homework in advance and to maintain a mindset focused on thinking outside of the box to generate some big returns. Here are some tips for how to launch your path onto the journey into real estate:
Look out for deals in markets that are about to see an uptick in the market. Take a look at up and coming areas with positive job growth. Resist the temptation to go for the best area – or for the cheapest. Learn the nooks and crannies of your investment town until you have an innate sense of which areas are about to rise in popularity and help your wealth soar along with it.
Stick with it for the long haul. If you are in need of some cash quickly, you will be tempted into flipping your properties quickly for cash. But remember that this syndrome is exactly one of the factors that contributed to many of the economic problems in 2008. You will be far better served if you can take wise advantage of leverage to control as many properties is possible that are generating cash for you. As long as you are buying the right properties, you have my endorsement to go ahead and borrow wisely. Always be thinking of the cash flow it is generating, not so much about the current appraised value.
Consider all of your potential sources of leverage. There are a number of places you can turn to for financing. These sources include banks, credit unions, and mortgage brokers. All of them have their advantages and disadvantages in terms of strings attached to what you are able to do, but the important point to take away is that you have a number of sources of financing that you can turn to get started on acquiring properties. And on the point of mortgage brokers, never pay a fee to a broker; their fee should come only from the lender.
Figure out your timetable. Remember that some lending sources are primed to deal in long-term mortgages of fifteen to twenty years or more. This method may work well for you if you are operating within a buy and hold strategy that involves holding properties over the course of years, but be sure to reflect on the best strategy for you in advance. Know what your time frame you are working toward to become totally mortgage free so you are receiving one hundred percent free cash flow.
Don’t be afraid to delegate. Many people are scared off from the real estate business because of concerns over spending too much of their time in the landlord business. You can proactively work with good property management companies to take care of more of the minutia that comes with owning properties. It can cost you upfront, but the ability to automate your earnings and remove your own need to be involved will vastly increase the value and passivity of being involved in real estate ownership.
What can you do now to get started in the real estate ownership game? What have you learned from your own forays into the world of real estate or have you even looked at it? How has your overall financial picture been impacted by holding passive assets such as property or has it - yet? What advice would you give to someone taking the plunge into this realm for the first time?
Real Estate can and should be a part of your get rich plan. No matter what your age, it is never too late to get started and if you are young and reading this, just learn what you need to learn and get started right away building your foundation to wealth.
To begin creating cash flow to invest in Real Estate, start here, with my FREE report:
