Building Wealth Through Real Estate Investing

Real Estate

Building wealth has always been an important part of household financial stability. It is a journey and like most journeys, the sooner you start, the further you’ll go. Thus, whether you’re saving for retirement, put your kids through college, earn a passive income or to achieve any other goal, it’s important to start as early as possible.

There are so many ways and sources to build wealth and one of the best and smartest ways to achieve permanent wealth is through real estate investing. The market for commercial multifamily is strong and has skyrocketed over half of the century with no sign of slowing down anytime soon so now is a great time to own properties.

 In Naples – Marco Island, many people not only come down to enjoy a vacation but they also come to get away from the winter weather up north. More and more people are beginning to learn the beauty these cities have to offer. So as more people come down to purchase property, the more people come down to rent a property as well. As profitable as it can be to own rental real estate, not everyone knows how to get started.

 

 

Here are 5 of the most useful strategies our team has listed for building wealth through Real Estate Investing.

 

1. VISUALIZE YOUR GOAL

It is always easier to make the right decisions if you know what you are doing and where you are going. Consider why you are investing in the first place. Certainly, your goal is to create wealth for yourself, but what are you going to do with that wealth? Do you have kids you want to send to college? Do you have debts you’d like to pay off or are you investing to retire in style? Whatever your goals are, always make sure you have a good sense of why you are investing.

Now that you’re clear with your goal, it’s time to decide if you’re going to invest actively or passively.

Active real estate investing embraces management which means you get yourself involved in asset management, property management or both. For you to become an active investor, you must have enough time to dedicate to the success of your project. Weigh your full-time job and family obligations and take an honest assessment of your expertise before jumping into becoming an active investor. If you don’t have the time and if you feel you lack the ability to run the business, then you’re better suited for passive investing. Passive investors hire trusted professionals to do the management for them because they want the benefits of real estate investing without the headaches of management.

If you haven’t put together a plan for your journey yet, there are many good real estate investment clubs that help people invest in real estate. They provide education, networking, and resources, which can help you with entrepreneurial and business-related efforts.

 

2. COMMERCIAL OR RESIDENTIAL REAL ESTATE

Once you decide if you’re a better match for active or passive investing, the next step is to decide what type of real estate you want to invest in. You have lots of options but the two general categories are commercial or residential.

Commercial Real Estate includes office, retail, industrial, hotel, storage, and multifamily (resident occupied real estate – five units and larger) while Residential Real Estate is a resident occupied real estate that is four units or smaller which includes single-family homes, duplexes, triplexes, and quads.

Many people view residential as an entry point into real estate investment as they are especially easy to rent, sell, and finance. They also maintain their value in the event of a downturn. When investing in residential properties, ensure that any purchase you make produces both acceptable cash flow and can appreciate over time.

 

3. GET RENTAL INCOME

Investing in real estate can provide multisource income and there’s a lot of money to be made in renting homes and complexes. If you rent a property, you should be getting at least 15 percent ROI in the residential space. Commercial, on the other hand, typically yields higher returns. Remember that your investment is more than just your down payment. It is important to keep track of your expenses, especially on any repairs as they can sneak up on you.

 

4. DO YOUR HOMEWORK THEN BUY REAL ESTATE IN UP-AND-COMING NEIGHBORHOODS

There’s nothing better than getting early because the best deals are going to come from budding real estate markets. We suggest you look for markets that are seeing a rise in younger residents, particularly those who are stoking growing careers. The property values in that area will rise as its residents’ earning power increases.  Once you own real estate and rents go up, never sell!

Never sell your real estate; just use it as a piggy bank. – Barbara Corcoran

 

5. TIMING

This ties in with the "Do your Homework then Buy a real estate in up-and-coming neighborhoods" strategy. In real estate, location is the most important factor but to optimize your capital gains, timing is everything. Be familiar with the ups and downs of your particular market and take advantage of its dynamism. Have you ever heard about inflation? Inflation is a general increase in prices of goods and services like food, rent, etc. over time and fall in the purchasing value of money. While most people view inflation with a sense of trepidation, people who invested in the real estate market look at this inevitable situation as a net gain especially if they've invested in right markets at the right time. People always have, and always will need real estate. As a result, real estate prices must stay aligned with average wages, taxes, and expenses so that residents can actually afford to buy homes. 

 

While there are learning curve in real estate investing, if you take things slow, you can greatly reduce your risk and turn, increase the likelihood for success. Over time, you will see your wealth grow and many opportunities come your way because you decided to start investing.

If you are interested in investing in the real estate, willing and able to commit then you should contact us today. We at The Welcome Home Team is here to help you turn your dreams into reality. Below are some of the available properties we have on the market for you.