Best Real Estate Investing Strategy to Build Real Wealth
Real estate has been making news for the last few years – good and bad. Many have considered investing in real estate an ideal long-term investment. Property values increase over time and generate passive income along the way. With the right kind of wealth building and investment strategies, it is possible to profit and build real wealth through property investments.
It may not be a simple process, as building real wealth takes many cycles. You cannot simply sit and relax and watch the money roll in. Good investment strategies involve having a set of sensible approaches, from identifying your needs and developing a program that works with your plans.
Here are a few wealth-building strategies that will help investors – new and experienced – achieve their end-goal
Own a home first
As one of the most common approaches being practiced today, home ownership has become a motivating factor for many. It serves as a base while you continue to live your lives. Owning a home, when held and sold, serves as capital-gains tax-free profit. Properties appreciate over time, so when the time comes that your children move out, you can sell the bigger home and settle in a smaller one. That leaves you with a bigger return on investment, and you can use the equity from the sale to start on other investments and earn income.
Buy properties from up-and-coming neighborhoods
Invest in a budding real estate market. Research where most young people move to nowadays. These are the markets where the value in that area will increase as its residents’ earning powers increase. If you realize that rents go up drastically, do not sell your property. Instead, rent it out and use your property as an income-generating property. The money will continue to roll in and you can use the profits for more investments.
Learn to know the “whys” when investing
The essence of true wealth is not just about building stock portfolios or money. In achieving lifelong wealth, one needs to understand and discover their “whys” and use it to help others. It should be your passionate motivation and life’s purpose. Planning is key, especially if your “why” leads you to launch or invest in a business. Look at all the resources available to you and have a clear idea of your goals, as well as an exit strategy.
Most successful entrepreneurs build and shape the purpose of their business by fully understanding their journey, from start to finish. Success metrics are something that can be measured; otherwise, it will be difficult to manage your investments. Once you have a clear understanding of your “why” and learn to empower people along the way, real wealth will soon follow.
Rent out residential properties
The real estate market may not be as booming as it was before. However, one of the best investment strategies to build real wealth is by investing in properties you can actually rent out. In reality, no matter how good or bad the economy is, people need a place to live in. Apartments, condos, duplexes, single-family homes, and townhouses are easy to finance, sell or rent. In the event of a downturn, these properties still maintain their value.
Another reason why this is a good strategy is that residential properties offer more flexibility than any other kind of real estate. For example, if you lose a tenant in a commercial real estate, the value of your property goes down. A residential property, on the other hand, holds and even increases its value, rented or not.
Invest in Dual Occupancy
This strategy is almost the same as property development, where you buy a building and build two or three dwellings to sell, finance, or rent out. In this case, you need to build a second dwelling or a granny flat on a property. You can partition an existing residential unit and create two dwellings. This gives you two rental incomes from one property. This is one of the wealth-building strategies that is considered a high-yield method because it has an opportunity for strong capital growth once sold.
Investing in high scale markets like real estate always involves risks and has a potential for financial losses. Before making such a huge decision, always seek professional advice and guidance from a licensed and accredited financial advisor.
Contact us at Colorado REIA for more information how to build your wealth and live a happy and financially stable life.