How do you become a millionaire with real estate?
Hi Sir/Madam,
How do you become a millionaire with real estate investing?
To create long term sustainable wealth, you need a plan- at least the ability to fully understand and know what you are doing. If you are able to understand the asset, your chances of selecting the right investment goes up drastically. To create millions in real estate, you simply need to understand the market and to have consistency in work ethic and dedication towards creating wealth.
To create wealth in real estate, you have to understand 2 things:
Cash flow:
This is the extra income you’ll get to keep each month (or year) that you own the property. Cash flow can be deceptive because it fluctuates when certain repairs are higher or lower in different months, so it’s important to factor in non-monthly costs like vacancy (the amount of time the property sits vacant), repairs, capital expenditures (expensive projects that need to be replaced on a home every so often, like appliances, roofs, windows, plumbing, etc.), along with the regular expenses (utilities, management, etc.).
Appreciation:
When the value of a property increases, we call this “appreciation.” While appreciation is not always guaranteed (just ask people who bought in 2006 and sold in 2010!), over time, historically, real estate has always increased in America, averaging 3% per year over the past century. Another type of appreciation that can come into play is known as “forced appreciation,” the concept of increasing the value by physically improving the property.
Creating wealth in real estate comes down to understanding these 2 principles and finding deals which will allow you to produce sound cash flow and a property which offers good long term appreciation prospects will allow you to increase your chances at attaining good returns in real estate investing.
There is also a tax benefit to real estate, understanding the tax advantages of real estate is important- most people do not pay tax on the cash flow income of real estate and this is important to understand as it allows you to create greater long term income. Cash flow provides you with sound returns on investment, and these returns will lead to you being able to create a triangle.
What is a triangle?
When you have cash flow coming in through a deal, you simply use that money to reinvest into another income producing asset and this produces an income stream in which you are creating continuous wealth through the passive income of the assets. This is how you retire young and live the life of your dreams.
Thank you for reading,
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Have a fantastic week ahead,
Regards,
Jagdip
