If you’re looking to grow your wealth, investing in real estate is a great way to make that happen. That is, as long as you know what you’re doing. And, you know how to choose real estate investments that will be profitable over the long term.
Today, I’m going to share with you 4 key ways that my wife and I grow our wealth with real estate by being savvy real estate investors in the Detroit, MI area.
1. Grow Your Wealth with Real Estate by Creating Cash Flow
One of the reasons I love real estate investing is because of its potential to create significant passive income and positive cash flow. If you invest in rental properties like my wife and I do, rent from tenants more than covers the expenses related to owning and maintaining each property.
In other words, the money coming in is well more than the money going out. This is positive cash flow. And, once the initial work is done to make a property attractive to renters, and an affordable property management plan is in place, the money we bring in becomes passive income.
Watch this video to learn how to know if a rental property you’re interested in will actually be a profitable investment: How to Run the Numbers on a Rental Property (In Under 5 Minutes)
2. Real Estate Allows You to Grow Your Wealth by Using Someone Else’s Money
In other words, you can use debt as leverage and use it to your advantage. If you read my previous blog about how to get the money to invest in real estate, you know that entrepreneurs can grow and scale their businesses to increase their profits. This can create the necessary funds to get started with real estate investing.
In reality, though, these funds may only cover a down payment, not a rental property’s full purchase price. That means you’ll likely need to get a mortgage to fully fund your real estate purchase. The key is purchasing a rental property that has the potential for significant cash flow. When you do, the tenants’ rent payments will cover your mortgage payment PLUS all the expenses related to maintaining and operating the property. THIS is how you use someone else’s money to grow wealth with real estate!
3. Depreciation of Real Estate Investments Gives You Tax Benefits
Are you looking to legally reduce the amount of taxes you owe each year? With real estate investing, it’s absolutely possible. That’s because you can use depreciation of your rental properties as a write-off on your tax return. Over time, you’ll recoup the cost of purchasing or improving your property while also saving money on taxes.
NOTE: This information is being provided to you for informational purposes only. It is not intended to provide, and should not be relied upon, for tax, legal, or accounting advice. While depreciation is something my wife and I utilize to help us grow wealth with real estate, you should consult with your own tax, legal, and accounting advisors for details regarding your specific situation.
4. Grow Your Wealth with Real Estate by Forcing Appreciation
Here, I’m talking about purchasing an undervalued piece of property in a great neighborhood. Also known as fixer-uppers, properties like this can be extremely profitable. That is, if you know what to look for and how to proceed once you’ve purchased the property.
The key is to find and purchase a rental property that has lots of potential. Then, you hire a reliable contractor to fix it up and ADD value. This then INCREASES the amount of rent you can charge your tenants. Watch this video to learn how my wife and I purchased an undervalued apartment building and significantly raised its value which then increased our income: Making a $660K Apartment Worth $1,000,000
Work With a Real Estate Investing Coach to Learn How to Grow Your Wealth with Real Estate
If you’re new to the real estate investing world, you might be wondering how to get started. The answer is simple … work with a real estate investing coach or mentor who’s already done what you aim to do. You’ll save time, money, and energy by avoiding common mistakes while also learning key strategies to ensure your success.
If you want to grow your wealth with real estate and even achieve financial freedom, I invite you to work with me. I’ll show you exactly how to become a successful real estate investor. And, I’ll teach you why real estate can be a bigger wealth generator than other investment vehicles such as stocks, bonds, or a 401K. If my wife and I can do it, you can too!