Unfortunately there is no such thing as a perfect investment because every
investment you take on will come with some associated risk however there are
many reasons why real estate stands out as a great investment among many others
real estate guarantees predictable returns and you can also use other
people's money to invest in it and even have the benefit of tax breaks too in
this video you will learn how to build wealth with real estate and if you're
new to the channel then hit the subscribe button below for more
life-changing content to start there are several benefits that come with real
estate investing so let's start with what those are first
benefit number one predictable returns one of the reasons why real estate is a
desirable investment is because of its stable nature and predictable returns
real estate returns generally come in the form of asset appreciation and cash
flow cash flow from real estate generally comes in the form of rents
that can be received monthly quarterly or annually more so you can continue to
receive this rent for as long as you own the property benefit number two ability
to leverage other people's money another benefit of real estate is that you can
use other people's money to invest in it otherwise known as leveraging for
instance you can purchase a real estate property with just 20 down while you pay
the remaining amount over a specified period with a mortgage loan this will
free up more of your cash to be used in other lucrative investment opportunities
benefit number three earning passive income real estate is an excellent way
to earn passive income what this means is that with relatively little effort
you can have recurring income from real estate through the rent payments you
collect not to mention real estate allows you to make money and have it be
taxed at a lesser tax rate than the employment income you earn
benefit number four tax breaks the benefits of real estate
are not complete without talking about tax breaks there are several ways that
you can reduce how much you pay as tax in real estate you can depreciate the
value of your property for the purpose of tax thereby reducing the yearly
taxable income you can also deduct the cost of operating and managing your
property to reduce the amount that you pay as tax
benefit number five protection from inflation one of the last benefits of
real estate is that it is protected from inflation in almost all cases the value
of the property increases over time and the property rent can be adjusted
accordingly to protect you from inflation this is different for most
other investments that may yield a low return during inflation now that you
know some of the benefits of real estate it is also important that you know how
to build wealth with real estate method number one long-term rentals one
of the most common methods of making money in real estate is through
long-term rentals the first step to building wealth with real estate through
long-term rentals is to look for a great property a great property is a property
in the right location location matters a lot if you want to make a profit with
real estate people always need a place to live however your property must be in
the right location to attract these people the right location may mean the
one that offers various job and educational opportunities a long-term
rental property is a property that is rented out to tenants for an extended
period usually for six months or longer therefore as a landlord your job is to
get the best house that can serve this purpose when looking for houses to buy
keep in mind that you may need to do some repairs and maintenance to keep the
property in working condition you need to be aware of problematic spots within
the house that may trigger a costly expense down the road which will eat
into your real estate profits you may do this yourself or hire a professional
home inspector to do a thorough inspection of the property before buying
it you may be able to minimize some costs using the tax breaks benefits of
real estate you can deduct utility costs like the cost of electricity internet
and water you can also deduct any fee related to any homeowners association as
well as property insurance the cost of managing your home is also a tax
deductible whether you manage your property by yourself or you pay a
professional to manage it for you you can also depreciate the value of your
house over the years to reduce how much you pay his tax remember proper
documentation of all these expenses is important if you want to qualify for a
tax deduction the next step is getting a tenant to occupy your property you
should know that not everyone who wants to stay in your house is the right
tenant you have to screen them to be sure that they are the right type of
person to hand over your house to if this is your first time and finding
the right tenant to choose seems difficult you can have a professional
realtor help you with the process two insights that may help you determine
whether a person is the right tenant to choose is their credit and criminal
records you need to know if they have been involved in any criminal activity
before or if they have a history of owing debts another important thing to
consider is how much you should collect as rent to determine how much you should
collect as rent do comparative market analysis and see what landlords with
similar properties in your area are charging as rent calculate your expenses
as well as the amount that you have to pay for utilities and taxes before
making a decision a property manager can help you with this work too if you feel
like you're not up to the task method number two short-term rentals another
way to make money in real estate is through short-term rentals short-term
rentals are usually for periods of less than a year such as vacation rentals you
may benefit more from short-term rentals if you have your property in locations
where tourist attractions exist tourists and people on vacation are
usually the ones who make use of short-term rentals the most unlike
long-term rentals getting tenants for your short-term rentals may be simpler
than you think you can easily list your property on an online marketplace such
as airbnb without having to look for people to rent it if you're unfamiliar
airbnb is the short form for air bed and breakfast it is an online marketplace
that allows people to rent properties online and has been around for more than
a decade and has continued to attract more and more customers however before
offering up your property as a short-term rental using services such as
airbnb there are a few things that you'd need to know short-term rentals offer an
exciting way to make money you're going to be welcoming a guest to your property
and because of that you have to prepare the accommodations for them and ensure
they're comfortable in the space the goal is to make the guests feel at home
so do everything possible to make your property stand out before you list your
property for rent the next step is to set a price for your property remember
that your property will be competing with others so you have to set a
reasonable price also remember that if you charge too much people may not use
your property and if you charge not enough you may not be able to maximize
your profits therefore you should do some market research of how much
comparable properties are renting for in your area after preparing your home for
a guest and setting an appropriate price the next step is to list your property
on sites such as airbnb beyond airbnb there are sites such as booking.com and
home away where you can advertise your property you don't have to limit your
marketing to these sites either you can also take advantage of social media to
advertise your property the internet has made things so easy such that you can
advertise to thousands of people without spending much money pay attention to
important details when describing your property online because you will be
competing with others with similar properties learn to sell the aspects
that make your property unique so that you can attract more people to stay with
you think like the guests and imagine what they would want and then make sure
that you provide it to them finally get ready to respond to inquiries and try to
do so on a prompt basis being attentive to prospective renters will have them
booking your property instead of your competitions but no matter how badly you
want to start making money with short-term rentals you should always
screen your guests before accepting them sites like airbnb let you leave reviews
so that you can check the reviews and see if you would want them on your
property also inspect the house after they check out to see if there is
anything you need to replace and then get it cleaned up for your next guest
method number three house flipping house slipping is another great way to make
money from real estate this strategy involves buying a house at a low price
and selling it at a higher price you can achieve this by buying low-priced houses
such as those that need repair fixing them up and then selling them within a
short time one of the keys to succeeding in this means of real estate investment
is by ensuring you are acquiring homes to flip in a desirable neighborhood even
the nicest house will have a hard time selling in a lackluster neighborhood
once you find the house that can act as a profitable investment inspect the
property and get an idea of what types or repairs and renovations would need to
be made in order to resell the property at a later date if the costs simply
don't add up to a reasonable selling price then the property may not make for
one that can be flipped also by renovating the home you take this chore
away from someone else who may not want to renovate a home but still wants to
live in that part of town so that convenience factor is something that you
can charge a premium for when you go to flip the home once a home is in sellable
shape the final step is to find a buyer you may look to a real estate agent to
market the property for you and in return you pay them a commission you may
also decide to market the property by yourself through social media or by
setting up a first sale sign and hoping for the best
method number four reits reit is short for real estate investment trust if
you're unfamiliar reits work like mutual funds and allow you to invest in real
estate companies reits are an excellent way to invest in real estate if you
don't have enough money to buy a property yourself it allows you to buy
shares of companies that invest in real estate and still make a profit the
average yield from a reit can be as high as four to six percent and investing in
reits can offer some benefits that you may not get from owning actual property
the first one is that a wreath gives smaller investors the opportunity to
invest in large projects and still make a profit there's also the benefits of
simplicity of investing in real estate through a reit in the form of a stock
rather than having to go through the whole physical property buying process
moreover reshares are more liquid than owning actual property they are bought
and sold on the stock exchange so it is easy to sell and convert them into cash
buying and selling of physical properties involves staging and listing
the property in most cases paying a ton of money in real estate agent
commissions so if you've been thinking about how to build wealth with real
estate you should now have a good idea of some of the methods you can employ
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