I was very lucky to grow up around a family who always invested in real estate. I was able to see firsthand what it was about, more or less, and what the results would yield over time. Aside from a market completely crashing overnight, everything else I could control: how much I pay; how much I put in for renovations; which tenants I keep and which ones I get rid of; how much to charge for rent; when and for how much to sell it for and so on.
I was twenty-two when I purchased my first piece of real esetate; turns out it was the best decision I ever made for myself and my future. It was my dad that encouraged me to buy as I had enough money saved at that point, and he knew that it would be better spent on a mortgage down payment than on anything else. After a few months of searching, I found one that I liked, one that met all of my criteria. I made an offer, 10% below their asking price, and they accepted! The sellers were very motivated to sell quickly so we made a good deal that met both of our needs. I was sixty days away from owning my first house! It was such an exciting and proud moment for me, as it was my first real estate deal. I will always remember that first experience - of what would later become a full blown real estate business.
With how unsure and shaky the economy has been for the last couple decades (particularly the global economic recession of 2008) I learned there is no such thing as job security or safety with any company. There is also no safety or security for retirement with our Government and pensions either. From a young age I was prompted by these conditions to decide and to act upon taking my future into my own hands; to create my own security and ‘pension plan’. Although it started slowly, I have become much savvier in the last seven years. I now enjoy a surplus of monthly income from that first house, and all subsequent rental properties that I have acquired since; not to mention the equity that has built up since then.
Since twenty-two, I have been constantly amazed at the seemingly endless benefits from investing in real estate; how it can provide a life of financial success, security and freedom.
Let’s look at the top benefits:
Let me demonstrate: Suppose you bought a house for $120,000. If you borrowed 80% of your purchase price, then you would need a 20% ($24,000) down payment. If your rental income covers your monthly payments and the house appreciated at 5% the following year, 5% of $120,000 is $6,000. That is a 25% return on your $24,000 investment!
This is a three-way win for you: you get appreciation, debt pay down and positive cash flow!
When you buy a property, you need to hold it until you make some serious money.
Houses are not complicated, and they are not scary. Their performance is predictable. They produce income when rented, and house rents have a history of increasing.
Once you have built up an equity position in an investment property, you can leverage that investment for cash in one of two ways:
#1. Secure a second loan against the increased equity.
#2. Refinance the original loan amount plus the increase in equity.
The bottom line is that this can only happen with real estate. There are many different ways and paths that you can take when it comes to building wealth with real estate. You just need a little education and a good mentor and/or support team behind you to make sure you’re doing things safely and profitably. Remember, there are no insurmountable barriers to entry. Combine all the benefits explored above and you will understand why real estate is the best investment out there for building your wealth and living financially free.
Yours truly, Melanie Bajrovic
If you want to learn more about creating wealth and securing your financial freedom through investing in real estate click here to see how I can help you on your path.
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