If you’ve ever really considered achieving a 7-figure net worth – or maybe even just dreamed about it – you may be thinking about how it’s performed. You may be surprised by the answer! The fact is that about 90% of all millionaires made their fortunes by investing in real estate.
There are some other methods to invest money that can provide the type of stability and growth that real estate can offer, especially single-family rental properties. Why is rental real estate your quickest route to becoming a millionaire? Here are a few strategies where owning Minneapolis rental properties can make it happen.
Monthly Cash Flow
When performed correctly, owning rental properties can help you generate a decent monthly income. In reality, not only should your rental payments cover the mortgage, insurance, and other expenses, but numerous investors also benefit from positive net cash flows. While it’s feasible to produce positive monthly cash flow with just one or two properties, many investors work their way up to a steady income by purchasing multiple properties.
Equity
Since your rental payments pay your mortgage, each one helps you pay down your mortgage and build equity in the property. This equity can then be utilized in numerous ways to help you further increase your wealth-building potential. For instance, equity loans or refinancing a mortgage may help you get funds to invest in another property. You also recognize that equity is in profit when the time comes to sell the property.
Appreciation
In addition to building equity, single-family rental homes tend to appreciate in value year over year. This can help increase the amount of equity you have in the home and, as a result, increase your investment activity as well. Although not all real estate markets see gains every year, and some markets will see home prices rise quicker compared to others, if you select your location well, you may enjoy remarkable upswings in value when the moment is perfect.
Resources
Investing in rental real estate is also an excellent method to access wealth-building resources that numerous other investors don’t have. When you have your rental properties leased and expertly managed, you can spend more time on activities that directly contribute to your bottom line. Allowing someone else to handle the day-to-day tasks frees up your time to focus on more productive investing activities.
Investing in real estate is another business that allows you to leverage other people’s assets to help you develop. Investing in partnerships and collaborations are popular, particularly with a mentor or trusted business associate. By pooling resources, you can accomplish far more than you could do alone.
Tax Benefits
Another benefit that’s important not to overlook is a federal tax. Numerous tax deductions are available to investment property owners, from operating costs to mortgage and property taxes. Numerous rental real estate investors end up paying far less tax on their monthly income than they would if it was earned in another manner.
With so much potential, it’s simple to understand how investing in rental real estate may lead to your millionaire status! However, to get started on the right foot, it’s imperative to have professional Minneapolis property managers on your team. At Real Property Management Fidelis, we engage with rental property investors to assess markets, set accurate rental rates, and even locate off-market properties for sale.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
