The secret to acquiring wealth is real estate. The economy may rise and fall, but real estate will remain one of the most reliable investments. The reason is simple: everybody needs someplace to live. So how do you go from chump to Trump? Here are some steps to help you manage your own real estate empire.
1. Start Small. The easiest way to start your real estate empire is by owning your own land. Renting is never an option for those hoping to own multiple properties in a lifetime. Many people resign themselves to renting during the first five to ten years of their adult lives, instead of paying that same monthly bill on a less luxurious house or condo. The only way to own a big house is to sell a smaller house, and the only way to own a smaller house is by always choosing to buy instead of rent.
2. Expand Slowly. The journey of a thousand miles begins with a single step, which is why this expansion process should go slowly, and should only be attempted by those serious about their investments. Purchasing and then renting an apartment is a great idea, as the monthly rent paid by someone will be applied towards your eventual ownership of the property. Start with whatever unit you can afford (ideally a property with costs that wouldn’t cripple you if it took a few months to find a tenant).
3. Reinvest profits. The number one rule in business and life, is to always reinvest your profits. While it can be tempting to start collecting your hard-earned dividends, reinvesting them will prove to be much more beneficial in the long run. While it may be tempting to take profits and go on vacation, reinvesting it in more properties, or making property upgrades, is vital in amassing and maintaining a position of wealth. From here, it becomes an exponential formula. The more property you own, the more income you generate. The more income you generate, the more property you can buy. Keeping this machine fed will ensure that you are financially stable for years to come.
4. Pre-Sale is your friend. Finding good properties at value prices can be something of a challenge, but there is one time when a condo, apartment, or home is always at its most affordable; before it is built. ‘Model units now open’ is a sign that should read, ‘get in here and make easy money’. Pre-sale homes and condos are always 30-50% less expensive than the same homes or condos a year later, based simply on the fact land owners often need those sales in order to finish the overall project. By getting in on the ground floor, and purchasing units in a building that is not yet open, you can guarantee return on your investment, and allow yourself far more wiggle room in your portfolio.
5. Begin to Take Bigger Risks. Years passed, and your flow of income is abundant: capable property managers are running things with minimal supervision. It is at this phase that people have the opportunity for rewards, if they are willing to take risks. The number one phrase in real estate is ‘location, location, location’. However, as agents will tell you, prime locations do not always stay prime for very long. Subsequently, areas that are less than ideal (and in some instances downright dangerous) could be the hot new ‘it’ place of tomorrow.
6. Stay Educated. It has all sounded relatively easy thus far; buy some land, make some money, buy more land, repeat. However the truth of the matter is the successful real estate tycoon treats this side investment as a full-time job. For those hoping to succeed at owning multiple properties, education and having a helpful property management company are both a must. Reading home listings, going to monthlyThornhill Wealth Forum meetings, going to open houses, watching market trends, and paying attention to lending rates, are all part of the necessary activities that successful real estate investors participate in daily. While this all seems overwhelming, the reality is that it is common sense. Buying low, selling high, and paying attention, are the keys to success, but they need to be closely monitored in order to guarantee profit.
Conclusion: While the road to wealth seems particularly elusive, it is not overwhelmingly difficult to find. Although not everyone wants to own massive lots of property, keeping these tips in your repertoire will keep you fiscally wise and may benefit you greatly, no matter what your endeavour.
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