If you have ever seriously thought about gaining a 7-figure net worth – or maybe even imagining about it – you might be wondering how it’s done. The answer may be far from what you expect! In fact, around 90% of all millionaires made 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 rental real estate your quickest way to become a millionaire? There are multiple ways owning Salem rental properties can make it happen.
Monthly Cash Flow
If done appropriately, owning rental properties will help give you a comfortable monthly income. The fact is that not only should your rental payments cover other expenses such as mortgage and insurance, but lots of investors love positive net cash flows too. While it’s possible to achieve positive monthly cash flow with just some properties, lots of investors work their way up to a steady income by purchasing multiple properties.
As your rental payments pay your mortgage, each one helps pay down your mortgage plus builds equity in the property. You can further increase your wealth-building potential in many ways with the help of equity. For example, equity loans or refinancing a mortgage can help give you money to invest in another property. You’ll also receive that equity in profit when it is time to sell the property.
Together with building equity, single-family rental homes often appreciate in value 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. Even if not every real estate market sees gains every year, and some markets will see home prices increase faster than others, if you choose your location carefully, you could see the remarkable upswings when the right time comes.
Real rental estate investment is also another great way to acquire wealth-building resources that other investors don’t have. When you have your rental properties leased and managed, you will be able to spend more time on projects that greatly affect your bottom line. Allowing someone else to manage your day-to-day tasks lets you focus on more productive investing activities.
Investing in real estate is another business that will let you leverage other people’s assets to help you grow. Investing partnerships and collaborations are common, especially with a mentor or trusted business associate. You can accomplish way more than you could do by yourself by pooling resources.
Another advantage that’s important not to ignore is a federal tax. Various tax deductions are available to investment property owners, from operating costs to mortgage and property taxes. Most rental real estate investors pay far less tax on their monthly income than they would if it was collected in another way.
With so many possibilities, it’s simple to see how investing in rental real estate could be your route to becoming a millionaire! But to get started on the right foot, it is necessary to have professional Salem property managers on your team. At Real Property Management Absolute, 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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