If you’ve ever thought about gaining a 7-figure net worth – or even just dream about it – you may be thinking about how it’s done. The answer might not be what you expect! The fact is that about 90% of all millionaires make their fortunes by investing in real estate.
There are a couple of ways to invest cash that offers the kind of stability and growth that real estate can provide, especially when it comes to single-family rental properties. Why is the fastest route to becoming a millionaire through rental real estate? Here are a number of ways owning a Riverside rental property can make it happen.
Monthly Cash Flow
If done properly, owning rental properties can help give you a comfortable monthly income. Indeed, not only should your rental payments pay off the mortgage, insurance, and other expenses, but several investors enjoy good net cash flows as well. While it is likely to achieve positive monthly cash flow with just one or two properties, lots of investors work their way up to a steady income by purchasing multiple properties.
As your rental payments pay your mortgage, each helps pay down your mortgage and builds equity in the property. This equity can then be applied in many ways to help you further grow your wealth-building potential. For example, equity loans or refinancing a mortgage can help provide you cash to invest in another property. You’ll also realize that equity is in the profits when it’s time to sell the property.
Alongside building equity, the value of single-family rental homes tends to appreciate every year. This can help build up the amount of equity you have in the home and, by extension, expand your investment activity as well. While not every real estate market sees profits every year, and some markets will notice home prices rise quicker than others, you could see significant upswings in value if you choose your location wisely.
Investing in rental real estate is also a good way to obtain wealth-building resources that most investors don’t have. You can spend more time on projects that directly impact your bottom line once you have your rental properties leased and expertly managed. You can focus on more productive investing activities by letting someone else be in charge of the day-to-day tasks.
Another business that will allow you to leverage other people’s assets that will help you grow, is by investing in real estate. Investing partnerships and collaborations are typical, especially with a mentor or trusted business associate. Pooling resources can help you accomplish way more than you could do on your own.
Another benefit that is important not to brush aside is a federal tax. Multiple tax deductions are accessible to investment property owners, from operating costs to mortgage and property taxes. Multiple rental real estate investors end up paying not that much tax on their monthly income than they could if it was obtained in another way.
With so many options, it is easier to see how investing in rental real estate could be your road to becoming a millionaire! But to get started on the right track, it’s important to have professional Riverside property managers on your team. At Real Property Management Integrity, 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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