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If you’re planning to invest, you might want to take a serious look at real estate investment. And the biggest draw for you would have to be that many of today’s successful millionaires are into it. The reasons may be varied. For one, real estate is an investment that hardly goes down. It appreciates over time. So much, that the billionaire king of steel Andrew Carnegie concluded that real estate is how 90% of millionaires got there.
Of course, it’s on a case-to-case basis. Knowing an opportunity and making the most of an opportunity are two entirely different things.
The story of how the Gold Rush of California in 1849 materialized should keep us in line. While the gold hauled from the site totaled over $2 billion, not everyone who took part in that amazing run ended up successful. Some who sold their most prized possessions to be in California earned but a pittance, short of the millions they expected.
One thing’s certain these days. As the virus continues to pummel America, real estate sales are soaring high in 2021. Any real estate agent worth his name in salt will tell you there are more real estate buyers than properties available today.
Such a seller’s market may give you the creeps, but there are unbreakable privileges in investing in real estate no matter the season. Here are three.
Leverage with Money
Have you heard about OPM or Other People’s Money? If you’ve been in business long enough, you should. When you buy a property, you leverage on OPM. Of course, liquidity and having ready-cash works to your advantage. But why waste your own money when you can make the most of other people’s cash? What’s more, they’re more than willing to part of their cash.
A glorious example here is the mortgage companies that make it their business to provide you with ample cash to finance the sale of a property. So long as you have an outstanding credit score, getting property financing should be a cinch.
Even better, there are ways you can get financing even with poor or bad credit. You may have to factor in bigger interests in the process. But at the end of the day, you’ll still get viable financing.
Of course, buying property to reside upon is a totally different story compared to buying a rental property. It is paramount you do your due diligence earnestly and know the nitty-gritty of the property before you make an offer.
Additionally, you can recruit investors to invest with you on a property. For instance, you can get a loan from the bank for 80% payment of a substantial property while look for other investors to take care of the 20% cash downpayment.
Leverage with Time
Real estate is an ideal source of passive income. You really don’t have to run the day-to-day to start earning a passive income. And that’s because you can actually leverage another person’s time.
While you can decide to actively manage your real estate property yourself, you can also become a passive investor and still earn. If you belong to a group of investors, you can still earn while leveraging OPM and piggy-backing on their investment.
Plus, you can leverage time by hiring property managers. To a large degree, they do the dirty work for you while you collect profits monthly. It’s all about properly planning your business.
Take note that the risks in real estate are minimal. That’s because unlike a car or pieces of jewelry, your property can’t be stolen and taken away. What’s more astounding is you can rely on insurance when natural disasters or unplanned things happen.
A good example here is condominium unit insurance. When a visitor visits your condo unit and accidentally gets injured, the insurance can take care of the medical bills or the threat of being sued.
Leverage Other People’s Experience
You can always learn from a mentor in any business.But the real estate business makes it a lot easier for you to learn on the fly.
That way if you’re just starting out in real estate, you need not fear you’d be committing huge blunders or not attract any market at all. You can piggyback on the expertise of someone ahead of you in the business.
For instance, you can work with a veteran realtor and invest with her on key properties. He can do the underwriting for you while you do a lot of legwork for him. In the meantime, you learn the ropes as you go.
Best of all, you gain greater leverage as the number of your properties grows. And that should be your goal. The more tenants you have, the lesser you’ll be affected if a tenant leaves.
Just take it a step at a time. You should profit handsomely as time goes by, not to mention get closer to your first million.