How to Become a Millionaire with Real Estate
A few years ago, this could have been summed up in one word: flipping. But these days the housing market is a very different beast. While those seeking to use real estate as an investment can certainly find ways to profit with property (especially in the long term), it will take a little more knowledge and planning to get the job done. But if you’re looking for alternatives to investing in the turbulent stock market and you’re not afraid of a little hard work, there’s no reason you can’t supplement your retirement accounts and truly hit your goal of becoming a millionaire. And here are just a few tips to help you use real estate to get the job done.
For starters, you need to understand a very basic principle when it comes to becoming a millionaire of any stripe. You must earn money while cutting spending. This sounds pretty self-explanatory, right? And yet, many people make investment choices that go against this basic rule, that are more gamble than premeditated plan. However, as long as you keep this tenet in mind when doing any real estate deal, you’ll have a much better chance of coming out ahead. Now let’s get to some of the strategy involved in making money in real estate.
As mentioned, flipping is out these days. You can no longer buy a house, fix it up, and expect to sell it before you make your first mortgage payment. So you have to be prepared to hang onto (and pay for) any piece of property that you purchase indefinitely. Of course, there are ways to cut or even negate your payments, and rental properties are the best. With many people cutting back, bailing on home loans, and looking for less expensive living arrangements, well-appointed rental properties in desirable neighborhoods (good schools, low crime, etc.) are doing quite well. This is a great way to pay for the mortgage without spending a dime (and potentially earn some passive income, as well). Of course, you could also take on partners to dispel some costs.
But before you even think about buying a property, there are a few things you should do. First, you should strongly consider taking classes and getting a real estate license. It is important to have a solid understanding of what you’re doing before you start signing up for loans. And if you have an RE license you won’t have to pay a realtor for the services that you can now perform on your own. From there you’ll want to become familiar with the real estate market you’re buying in, housing market cycles, and the ins and outs of the lending process. If, for example, you want to purchase in a certain area that is rather well-to-do, but you also want to try to secure an FHA loan, it behooves you to understand going in that FHA loan rates and limits could derail your plans.
The idea here is to do some legwork at the outset so that you can shop smarter when it comes to real estate investments. If you take the steps necessary to become educated and then take your time finding the right properties, there’s no reason you can’t cut costs, earn more, and ultimately reach your goal of becoming a millionaire. And with the housing market incredibly low, you only stand to gain if you play it smart with your purchases.