Just when you think you know a lot about real estate, someone can come along and teach you a thing or two. Real estate millionaires are made every day of the year and in good times and in bad. There is no one-click formula for success, but there are 3 things millionaire property investors know that you don't when buying properties. The difference between success and failure is learning to leverage risk versus long-term rewards. You can do all the planning and research that you want and still come up short on net worth. When you learn to think like the pros, it is only a matter of time before you become one too.
3 Things Real Estate Millionaires Know About Investment Property
Properties are Purchased to Hold
If you get the opportunity to review the portfolio of a millionaire, you will often notice a pattern in buying and selling. Since real estate records are public, your own research can help prove that properties are meant to be held for a period of 5 to 7 years. If you think you can earn enough to live on in 2 years or less, you might be better off putting your money into liquid assets like mutual funds or ETFs. The largest profits are made on the sale of a held property. This is not to downplay the profits that you receive from monthly rent. Having a cash flowing property builds wealth. You should only keep in mind that holding a property for as long as possible can make it appreciate in value. This method could quickly double your net worth.
Only Buy Properties You Would Live In
One of the most basic things in life is your emotional connection. When you are connected emotionally to something, you will make sure that every action or reaction that you make benefits what you love. The same is true for investment properties. If you research and buy investment property that you would live in, the chance of you putting every ounce of sweat and time into it to make it successful will double. It is easy to get comfortable when owning a property and the quality of tenants or income produced can suffer. When you absolutely love the property that you own, you can make it become a successful real estate venture. Properties like those in Florida cities like Orlando and Jacksonville prosper due in part to the local economies and completely dedicated owners.
Never Be Afraid of Property Mangement
You can buy your property to hold and you can put a lot of your own work into it, but one thing you cannot do for very long is complete every task yourself. Time management is the last task that you can learn to do effectively just like a millionaire. You do not have to give up control of your property if a property management firm is hired to do the work for you. What you are doing is taking the majority of daily workload off your shoulders so you can concentrate of making smarter investing decisions. Performing like a mulitmillionaire is one of the fastest routes to becoming one. Purchasing an investment property should be fun and will certainly help you learn the ropes of real estate investing.