When we think of the word millionaire, we think of rich tycoons jet-setting the world in their private jets having real estate investments as their playground. There is no shortage of self-help gurus who tout get-rich quick schemes but making money and getting wealthy is not always instantaneous – unless you have won the lottery. One way that entrepreneurs can move closer to that goal is to always keep learning. Sorry to be bearing the tough news upfront – Growing wealth happens over time, it must be built brick by brick. There are plenty of ways to build wealth but investing in real estate will give you a more sensible way to build wealth over time. It’s a smart way of making money work for you no matter how comfortable or financially stable your current lifestyle is.
You need to approach real estate investing with the same business-like mind set you would apply when doing other types of ventures. That means having an expert helping you invest in a real estate deal will put you on the right path.
When it comes to real estate investing there are dozens of opportunities and strategies that can help you get going on the profitable track. Sometimes it can lead to analysis-paralysis. Managing risks, rather than avoiding them, is the key to profitable investing. While you’re at it, keep in mind that these risks can also be potential for growth. Our eBook can help you to get enough visibility on real estate investment.
Even though real estate has generated more wealth than any other industry, many people are still wary of getting started. Here are 3 ways to explore greater returns with your real estate portfolio
1. Think beyond a traditional real estate portfolio
Renting may probably the most conventional method of making money in real estate and becoming wealthy. The trick is to find opportunities where the regular homebuyers miss the diamond in the rough. A smart investment focused expert can help you identify opportunities where there seem none. If you’re not paying attention, you can miss the opportunity to make money by investing in real estate. Like in any area of life, your career, education, and personal life, there are missed opportunities everywhere! When you’re focusing on what you’re doing, you can miss the potential for wealth if you’re not looking for it. You make money in many different kinds of real estate investments such as student rentals, short term storage units, overseas holiday homes etc.
Residential, commercial, and industrial real estate are all available options for purchase. One of the most significant advantages of owning rental property is the consistent cash flow it produces. It is the most effective way to earn a passive income from real estate investment.
2. Flipping Real Estate with new additions such as basement suites or garden suites
The running joke is that all real estate investors are flippers, and most of them do indeed flip homes. It is true that many investors use fix and flip as a strategy. Several reality shows have focused on this sort of real estate investing. The truth is that this type of real estate investing carries a high level of risk unless you build more opportunities for passive income. The winning mantra is knowing the numbers well along with having access to a strong team ready to jump in and turn things around like a well-oiled machine. You need to be very careful with this risky real estate investment strategy. Don’t fix a property that is beyond repair. The idea behind fix and flip is that you purchase a home, repair it, and then resell it. Even if it’s completely gutting the property and rebuilding it from scratch an investor needs to make sure the property can be sold at a profit, or else the deal isn’t worth it.
Another important property investment tip is to budget for every reno. Don’t over-rehab or over-leverage yourself.
2. Flipping Real Estate with new additions such as basement suites or garden suites
With the growing popularity of AirBnB and other sites there are many people that believe a vacation rental is a must have for a real estate portfolio. On the plus side, you may be able to use the home when it isn’t occupied. It may also be significantly easier and less expensive to finance a vacation rental, especially if it meets a lender’s definition of a second home and you don’t use the rental income to qualify. As an entrepreneur, you must make the most of your time. Making sure to keep up with how each aspect of your business is doing on a regular basis is vital. While vacation rental properties are profitable you have to account for value-add services and maintenance — which can be more involved and expensive than for a traditional property. Many vacation rental property owners find that marketing and managing their properties can be more complicated than other types of properties.
2 Bonus tips
1. Be open to short term borrowing
Hard-money lenders make short-term loans to individuals who would not normally be eligible for funds from traditional sources such as the big banks. These are loans with high-interest rates as they’re only for a short period. Sometimes, a lot of people wait for the perfect time to do things. However, it’s important to recognize that there are some opportunities where time is of essence and it’s imperative to take immediate action. With hard money lenders, you can get the cash you need to get started with your real estate projects. This way, you won’t have to wait, and you’ll get your project off the ground quickly. This could be a good bet if you have certainty but lack the required funds.
2. Leverage the experts
Shameless plug warning :). We at EIA strive to be honest about our limitations and thus we simply refer you to an expert who is more experienced in these matters. There are a lot of models that might work better for you; what matters is identifying where we can save you time and money by cutting out the fat. Don’t waste valuable resources on something that will not benefit you in the long term. Save your resources for things that really matter to your success. There’s no point in reinventing the wheel, when there is already a proven step by step process available to you; so, don’t be afraid to ask for help!
The Bottom-line
Though real estate investments have ups and downs, they can prove successful when you take the right action and get off the fence from being a spectator to a real estate investor.
As Wayne Gretzky said…”You miss 100% of the shots you don’t take”.
We cannot understate how important it is that as an investor you protect your investment. Whether you are investing in a piece of property with commercial possibilities or a cottage to live in during the weekends, make sure to take the necessary steps to secure your interests in whatever way(s) possible. Feel free to connect with us for a no-obligation chat to help you set the right goals and get on the fast track of profitable real estate investments.