As the great Robert Kiyosaki shared, “The key to financial freedom and great wealth is a person’s ability or skill to convert earned income into passive income and/or portfolio income.”
It seems more difficult than what it truly is and we don’t mean you can master it in one day, it takes time to learn the practice. However, once you understand, you can become a successful millionaire through the purchase of land or homes and transforming them into investments. The real estate market has skyrocketed in the past four years. The impressive numbers behind what one can spend on an investment property and what you can gain back have leveled.
Elite groups of real estate agents have been partnering up and developing creative ideas to increase the profit behind investment properties. These include renting out homes such as Airbnb, VRBO and other platforms.
Unsure of where to start with your first investment? Here are five steps to get you started:
Understand the four wealth generators in real estate: cash flow, equity, tax savings and appreciation.
Ask yourself these three questions:
- What do you want?
- Why do you want it?
- How will I get there?
This is only the beginning of your investment planning. Having a motive behind your actions will inspire within.
Find a real estate agent who has experience with investments
When making offers, do not make them with terms you cannot afford!
Going back to understanding cash flow, if your finance offsets your cost you’re doing something wrong. Make sure that the downpayment and monthly mortgage make sense. Use those numbers to build a business plan on how much you’re going to rent for or what you’re going to transform the property to in order to bring in more income.
Buy properties with multiple units
The number of units in a property makes a large difference in the cash flow generation. Most real estate gurus prefer to invest in commercial or multifamily properties because they generate more income.
Once you’re past the first property, purchasing a second and on becomes easier. The real estate industry is home to many millionaires and with knowledge, courage and strategy you can become one too.