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Posted 13 November 2020
Having a job is good, but having an investment is better. If you have a job right now, you are investing your time and skills into the business. Yeah, you indeed get paid for those investments, but the truth is that those investments are only one time payments.
Why don’t you look at something that could pay you over and over? Some people say it’s making your money work for you, but I say it’s investing in real estate.
Real estate is an excellent way of making money. It’s the top way people make their millions; read this article by business news daily to see how most people became millionaires. If investing in real estate is an option for you, you should know you will likely make it; It’s what made my uncle a millionaire. However, he had a good-paying job but kept investing in real estate.
There’s nothing wrong with having a job, and nobody said you should quit your job. Jobs are fantastic; they keep you going if you don’t have cash at hand or partners willing to invest in your business. Sometimes before a bank gives you a loan, they’d want to see your track records to prove you can effectively handle the investment.
It’s true that real estate made the most millionaires, but watch out because it could be risky. When there’s a crash in the market, an economic meltdown, or a crisis, real estate prices may drop.
Although some people who already had cash seating in the bank would want to buy and might think they are getting a great deal. Of course, they are., but the sellers who invested in real estate to make money may have to lose. Consider it as cash moving from one hand to the other. In this article by Investopedia, you will discover how Donald Bren, the top real estate billionaire, made his fortune.
So if you are ready to start investing in real estate, below are things you should know when you want to invest in real estate.
There’s no doubt that you have to have some money before you buy a property. You can purchase properties without your money. For example, you can borrow money from friends and family. But you still need to have money. It helps you get started.
Some real estate gurus might brag that they’ve never lost money in real estate, but that’s because they keep reinvesting in themselves to develop their skills. Most of the time, they check a lot of properties before they buy. They have been doing this for so many years; they’ve got the experience to know what will surely make or lose money.
You are just starting, and even though you might have learned so much about investing, you don’t have the experience. Of course, you’ll know more as you go, but that’s why you need extra money at hand to keep you going even if you take a blow. In this article by Forbes, you will learn the things you should know to avoid losing money in real estate.
2. Evaluate Properties
There’s no doubt evaluating properties before you buy them is what determines a good or bad investment. Most people are wrong in this sometimes. Yeah, there are always predictions before a crash, but the fact is that nobody knows what the future holds.
As an investor, what you should focus on is to know what type of properties you are going to buy. It could be rental properties or flipping. In this article by Mashvisor, you will see the best kinds of real estate properties you can invest your money in.
3. Real Estate Is Long-Term
Whether it’s renting or flipping homes, real estate is a long-term game. If you ask these millionaires that made it in real estate, they will tell you it took them years. I’m not implying you can make it quickly, but in general, it takes time.
I know some people can sell a piece of property they bought cheap for millions, but this isn’t common. If you want to learn about flipping a house, you can read this article by Dave Ramsey.
Without cash flow, you will be pouring only your earned income into real estate investing. For faster growth, you need cash flow; this means your investments are bringing in money.
As a landlord, you need cash flow to grow your portfolio. It should be — more rental properties equals — more cash flow. In this article by Mashvisor, you will learn how real estate investors make money with cash flow.
5. Tax Advantages
There are a lot of tax benefits when you invest in real estate, primarily property investing. The tax code in place helps real estate investors right off a lot of their losses, depreciation, and expenses. Depending on what happened, a real estate investor can write off properties. Many of these real estate moguls are taking advantage of this tax code to write off jets, buildings, and what have you. You can learn more about the tax code in this article by BiggerPockets.
6. Hiring contractors
Whether it’s flipping or renting properties, you still would have to work with contractors. Only if you are a do it yourself person, like the fixer-uppers, then I can say you don’t have to worry much about this. I know some people can build a home from scratch. But if you want to scale fast your portfolio, you need to work with contractors.
Having the best contractors that understand what you want and how to get things done quickly is essential. You must have a good relationship with your contractors because they are the ones that determine if you’ll make a profit or not. If they are too expensive, then you might not make a profit. But if you have a good relationship with them, they can give you a deal. In this post by HomeAdvisor, you will learn how to hire and work with a contractor.