Due to overwhelming response to our last investment post, we have decided to delve a bit deeper into building real estate wealth. I wholeheartedly believe that real estate investing is the best long term wealth building vehicle in America. Anyone that knows me can tell you I don’t just talk about building real estate wealth, I practice it every day! It’s part of what qualifies me to be a great Realtor!
I started buying investment properties in my twenties (a long time ago). I have always believed in learning from “doers” instead of “talkers.” There is always more value with experience then research! When I talk with friends and colleagues about building real estate wealth, I am always amazed with how passive some people are about planning for their personal retirement or kids college education. The best part of real estate investing is basic math shows better returns then almost any other investment.
Let us consider the following scenario and it will become a little clearer. If you are a parent or grandparent and are planning to sending your child/grandchild to college you know it’s going to be expensive! If your grandchild is three years old, and you purchase a rental property for 200K, using a professional management company (a service we offer at Windermere Real Estate Property Management), your investment scenario would look a lot like this:
I built this model to be incredibly conservative, and it doesn’t take into account increasing rental rates which will also increase your cash flow over the mortgage costs. You can use this positive cash flow to repay your initial investment or better yet, apply it to the principal and pay off the property even faster!
While I did simplify this example, the reality of taking 40k dollars and turning it into your child’s education is a very compelling reason to consider real estate investment for your personal goals.
If you would like more information and to personally discuss building real estate wealth please contact me and I would be happy to meet with you.
Stay tuned in the following weeks where we will talk about the steps and process of buying rental/investment properties and building real estate wealth!