If you’ve ever thought seriously about getting a 7-figure net worth – or maybe even just dreamed about it – you may be wondering how it’s done. The answer may surprise you! The fact is that roughly 90% of all millionaires made their wealth by investing in real estate.
There are some alternate ways to invest money that offer the kind of stability and growth that real estate can offer, mainly when it comes to single-family rental properties. Why is rental real estate your surest way to becoming a millionaire? Here are a couple of approaches to owning Ellenton rental properties that can make it happen.
Monthly Cash Flow
When performed appropriately, owning rental properties can help you generate a good monthly income. Actually, not only should your rental payments cover the mortgage, insurance, and other expenses, but multiple investors appreciate positive net cash flows as well. Even though it’s possible to attain positive monthly cash flow with just one or two properties, most investors work their way up to a steady income via owning multiple properties.
Because your rental payments pay your mortgage, each one helps you pay down your mortgage and build equity in the property. This equity can then be used in many ways to help you further increase your wealth-building potential. For instance, equity loans or refinancing a mortgage can help give you money to invest in another property. You also recognize that equity is in profit when the time comes to sell the property.
Aside from building equity, single-family rental homes seem to appreciate in value year over year. This can help increase the amount of equity you have in the home and, by extension, increase your investment activity as well. Even though not all real estate markets see gains every year, and some markets will see home prices rise faster than others, if you select your location properly, you might experience spectacular upswings in value when the perfect time arises.
Investing in rental real estate is also an extraordinary method to access wealth-building resources that multiple other investors don’t have. Once you have your rental properties leased and expertly managed, you can spend more time on activities that directly contribute to your bottom line. Letting someone else deal with the day-to-day tasks allows you to focus on more productive investing activities.
Investing in real estate is another business that can permit you to leverage other people’s assets to help you thrive. Investing in partnerships and collaborations are common, mainly with a mentor or trusted business associate. By pooling resources, you can achieve much more than you could do alone.
One more benefit that’s important not to overlook is a federal tax. Multiple tax deductions are available to investment property owners, from operating costs to mortgage and property taxes. Lots of rental real estate investors result in paying far less tax on their monthly income than they would if it was acquired another way.
With so much potential, it’s easy to see how investing in rental real estate could be your path to becoming a millionaire! But to get started on the right foot, you need to have professional Ellenton property managers on your team. At Real Property Management Sarasota & Manatee, we partner with rental property investors to assess markets, set accurate rental rates, and even locate off-market properties for sale.
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