Apparently the word on the street (Main Street, that is) is that having rental properties is a surefire way to build wealth. Well, it’s one way to grow wealth, but it’s certainly not foolproof.

Slow and steady

Successfully investing in real estate in hopes of creating a steady stream of passive income takes time. Breaking even doesn’t happen overnight, and neither does making a profit. But it can happen, and if it does, it can significantly increase your cash flow. The best part of property investment is that you can’t lose everything like you can in a fund or in the market. You will always have this house or building even if the current value is not what you dreamed of.

money generator

Here’s what’s historically true: you don’t actually make money on the house you live in. Let’s say you buy a house for $200,000 today and in five years you sell it for $300,000. Well, you need a place to live, so you’ll have to buy another $300,000 house that’s probably pretty similar to the one you just got. Unless you downsize, it’s often a wash. So can you make money owning an investment property? I fully understand wanting to have concrete assets (pun intended) versus those that exist as numbers and graphs. But before you jump into a Investment property, plan how much you’re actually going to spend on it rather than profit from it.

Edifying tale or success story?

For every cautionary tale, there’s a success story – where people make money, get big tax incentives, and live off that profit. It’s up to you to weigh the risk and reward not only with how you want to win, but also with how you want to spend your time. If you’re still enthusiastic about investing in real estate, then go for it, but do so with caution. If you are buying a foreclosed property, be aware that there may be additional tax bills and outstanding HOA assessments that you will need to pay for this. cannot be disclosed at the time of sale.

Know the rules

In many areas, it is nearly impossible to evict tenants, even if they don’t pay. During the COVID-crisis, tenants were able to delay paying rent for more than a year. It’s true, many landlords haven’t collected a cent in rent for over a year! Before you register for an investment property, make sure you know the laws in your state.

An investment property is not as simple as the get-rich-quick scheme that it is sometimes portrayed as. This path is not for everyone, but if you decide to invest in real estate, do it smartly and pursue it.