Many millionaires believe that the source of their wealth is property. Real estate, they say, is the best way to accumulate money over the course of a lifetime.
But how do you do it effectively? That’s the question.
You probably know many real estate investors in your life who haven’t quite got the returns they expected. They’ve invested an enormous sum of capital, but they aren’t seeing any results from all their hard work. They’re struggling for years, without getting the lifestyle they imagine.
There are many ways that you can make money as a property investor. The first is property appreciation – the rise in the underlying value of the assets that you buy. In 2021, for instance, your property might be worth $250,000, but in 2022, it could go up to $270,000 for a $20,000 gain. The second is rental income. This can provide you with yields of up to 10 percent on your original property – a worthwhile investment indeed.
And then there are the tax benefits, as explained by sites such as https://www.accuplan.net/blog/utilizing-ira-buy-sell-real-estate-ira/. These can be quite substantial when you add them up over the course of a lifetime.
In this post, we take a look at some of the tricks to becoming seriously rich through real estate investing. Some of the points we make are simply common sense, while others are less intuitive.
Buy Where Prices Are Rising Fastest
If you can, look for opportunities to buy properties in areas where prices are rising the fastest. This way, you can maximize the appreciation on your assets when you come to sell them.
Property appreciation can be quite extreme in some cities. For instance, you might see a 100 percent increase in prices over just five years. When you combine gains like this with rental income, your net worth can go up substantially.
Renovate For Appreciation
You can also “force” appreciation by renovating existing properties. Fixer-uppers usually go cheap because nobody wants to invest the time and energy into maintaining them. But renovations change all that. By redoing the paintwork and removing anything unsightly, you can alter how much people in the market value it. Often, you’re able to make back much more money than you put in.
Buy More Often
Many property investors stop at one or two properties. But that’s no way to get rich. If you want wealth, you have to keep investing for a long time – many years if you can.
Ask For Better Deals
How much capital you pay upfront is essential when it comes to property purchases. Spending $200,000 on a real estate investment is very different from forking out $250,000. Look for discounts whenever you can to ensure that you get the very best deal.
Buy Bigger Properties
According to https://www.forbes.com/sites/brandonturner, you should always seek to trade up when investing in property. Bigger is better, so invest in HMOs and apartment blocks if you can to spread your risk.
