Building Wealth Through Long-Term Rental Investments

Does real estate make you money? Yes! There is no lie about the fact that real estate makes for a good investment. But is every real estate investor you have met wealthy? A millionaire? Rolling in money? Well, no. Why? If real estate makes you money, why isn’t every investor wealthy? The simple answer is they are missing the key advice we are about to tell you. Understanding the real estate market, researching, and taking educated risks will pay off and make you money. Here’s how you can start building wealth through long-term rental investments.

Understanding Real Estate Investments

Not all real estate investments will make you money, and no matter how good you think you are with them, you need to choose one niche and stick to it if you want to make wealth through real estate. Here are some of the different kinds of real estate investments you should consider: residential properties, commercial units, industrial spaces, and raw land. However, the best among these is rental properties. Rentals are the most common as well as most successful type of real estate investment.

How Does Real Estate Investments with Rental Properties Make You Wealth?

Rental income offers a constant cash flow. This not only gives you financial stability but also an ongoing source of income that you can easily reinvest.

The rental property you own also gains value over time, the increased value adds to your ROI, and you can cash it out whenever you please.

When you rent out a multi-unit and also live in that same property, you may even gain tax benefits.

How To Start Your Real Estate Journey?

Here are things you need to take care of before starting your investment journey.

  • The first thing you need to understand is that you can’t enter real estate without proper education, research, and understanding of the market. Blindly spending money doesn't make you money; you need to understand the fundamentals, all property types, as well as the regulations.
  • You should also have your financing options ready. Whether you choose private lenders or partnerships is up to you.
  • When investing in real estate, make sure you choose your niche carefully. Your investments should be considerate of location, your goals, budget, and market preferences.

Here are three strategies that will make your money with rental property investing:

Buy and Hold Strategy

“Buy and Hold” is when you buy a property and hold it for a long period to gain profit through appreciation in property value over time. It only pays off when you hold your property for longer periods, such as ten years or more.

Meanwhile, you can put your property up for rent and enjoy regular passive income. However, there are a couple of downsides; the first is property management and maintenance that you will need to take care of before selling. The second is that it’s not always easy to sell your property quickly since it’s an illiquid investment.

House Hacking Strategy

With house hacking, you gain multiple benefits. House hacking is when you have a multi-unit property and you live in one unit and rent the others. This way, you can gain tax benefits, earn a passive income, and, when the time comes, sell the property for profit.

However, here too, there are some risks like active management, looking for tenants, and minimizing the vacancy rate. Moreover, living with or near the tenants is never easy, so these are some challenges you will have to face.

Buy, Rehab, Rent, Refinance, and Repeat,

Buy, Rehab, Rent, Refinance, and Repeat, or BRRRR is one of the most popular ways to earn wealth through real estate. Score distressed properties, renovate, and rent. Once the value is acceptable, refinance and repeat the whole process. This is often a full-time job for an investor, not a side hustle, so this is the biggest drawback. Apart from that, you need renovation experience and a good eye to find and identify potential properties; it’s like finding gold in coal.

RCN Capital

RCN Capital offers short-term and long-term financing options for real estate investors, commercial contractors, developers & small business owners across the nation. Whether you are looking to fix & flip properties or hold properties for rental income, RCN has flexible options that are suited to your needs.

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