If you’ve ever thought seriously about attaining 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 have made their fortunes by investing in real estate.
There are various new techniques to invest money that offer the sort of stability and growth that real estate can offer, especially when it comes to single-family rental properties. Why is rental real estate your quickest route to becoming a millionaire? Here are a number of ways owning Bonaire rental properties can make it happen.
Monthly Cash Flow
When done right, owning rental properties can help you generate a convenient monthly income. In fact, not only should your rental payments cover the mortgage, insurance, and other expenses, but many investors benefit from positive net cash flows as well. Even though it’s likely to accomplish positive monthly cash flow with just one or two properties, most investors work their way up to a steady income through buying multiple properties.
Equity
Because your rental payments pay your mortgage, each one helps you pay down your mortgage and build equity in the property. This equity could be used in many ways to help you further increase your wealth-building potential. For example, equity loans or refinancing a mortgage can help give you cash to invest in another property. You also recognize that equity is in profit when the time comes to sell the property.
Appreciation
Together with building equity, single-family rental homes tend 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. While not all real estate markets see gains every year, and some markets will see home prices rise faster than others, if you choose your location carefully, you could see impressive upswings in value when the time is right.
Resources
Investing in rental real estate is also a great way to access wealth-building resources that many 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 take care of the day-to-day tasks allows you to focus on more productive investing activities.
Investing in real estate is also one business that will enable you to leverage other people’s assets to help you grow. Investing partnerships and collaborations are common, especially with a mentor or trusted business associate. By pooling resources, you can accomplish far more than you could do alone.
Tax Benefits
Another benefit that’s important not to overlook is a federal tax. Many tax deductions are available to investment property owners, from operating costs to mortgage and property taxes. Many rental real estate investors end up paying far less tax on their monthly income than they would if it was earned 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, it’s important to have professional Bonaire property managers on your team. At Real Property Management Vesta, we work with rental property investors to assess markets, set accurate rental rates, and even locate off-market properties for sale.
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