5 Tips on How to be a Millionaire in Real Estate

Good day! Today we’re here to look at the 5 Critical Things to look at to be a millionaire in real estate.

Real estate is one of one’s basic life need. And holding real estate assets is one sure fire way to maintain a millionaire status. Even some of the biggest, most powerful multinational companies hold real estate which enforces their millionaire status even more. It is one of life’s basic need. When it comes to food, shelter, and clothing, real estate falls in the shelter business. And it’s there to stay for s long time.

It is a limited resource and the demand is consistently rising. Most especially given the population increase. So as long as there are people, you will always need shelter. And being in the business of real estate has never been better. It is also one of the most flexible assets you can have. It can protect you from inflation, you can earn from it, and you can have residual rental income from this type of asset. And while you’re using it, it’s even increasing in value. This particular type of asset can give you the retirement fund that you’ve been waiting for your whole life.

So that it can give you passive income on a monthly basis. But how fo you do it correctly? What are the factors you have to look into? How can real estate make one an established millionaire in your life?

Today, we’re gonna talk about those important factors that you have to consider when you’re investing in real estate so that you can be an established millionaire through this particular type of asset.

The first factor that you have to consider is Location, Location, Location.

It’s more than just a motherhood statement, it’s been there for the longest time because of one simple thing: it’s the truth. This particular truth holds up as far as any market type is concerned. If you’re looking at the luxury segment of real estate, this is fairly noticeable. You’ll find a property that is in the middle of everything, it’s near the business, the lot cuts are large, or the unit cuts are large, the finishes are amazing. You know, all of these things will be just right smack in the middle of it. There are banks, commercial area, offices, all of these things are just gonna be very, very near it. And its location, both networks are accessible, you know. And its location will provide the utmost convenience for its buyer.

If you’re looking at the mid-market segment, or an above market segment, you’re looking at the place where there is a bit of luxury in them and also above average sizes that provide for a home and accessibility is felt to the business district. It should also be in the location where it’s near the business so that they can move up the corporate ladder much easier.

If you’re looking for a lower type market segment property that you wanna purchase for investment, you have to take a look if it’s near road networks, if it’s near the commercial areas, market place, groceries, everything like that. All of these things which contribute to an easier life.

So relatively, when we’re looking at any type of market: high, mid, low, as long as it’s in the center of that location, the unit cuts are good and it provides a lot of convenience for the unit owner, it should be one of the most important factors that you’re considering. You cannot discount the importance of location with regards to any type of property when you are investing.

The second set that we have for you is Learn Then Earn.

How many times have you found yourself wherein you’ve emptied up your savings to but this one property and hope for the best? I’m sure it’s happened to some people your probably know. And it’s quite difficult to get yourself out of that situation.

The key here is start small then dream big. You do know that you have some big dreams as far as managing the real estate business is concerned, it’s not bad if you’ve one day, we find you managing a whole building, owning a whole building and leasing it out. But for you to take out all of your life savings and splurge it into one property, and get stuck with it because you don’t know what to do with it, that could simply be a living nightmare.

What we want you to do is while you’re learning the ropes of real estate investing, you’re learning how to sell a property, how take an offer, how to negotiate, what fees are required, what are the deadlines, you start small so that you know what the market is. And once you understand how to move, then you can move on slowly to bigger projects.

Have a plan. Take seminars. Understand the market. Get a professional’s advice. Talk to real estate professionals. Talk to architects. Talk to contractors. Talk to realtors so you know how much cost it would take for you to develop a property and resell it later on. Talk to a professional broker so you know more or less the leasing rates in a particular area.

The key here is to learn first and then the earning follows. You have to learn first how to experiment with money that you are comfortable using with and growing and once you’re able to grow the money, then you could invest it more and then more and more. Then you can invest the earnings that you get from the smaller projects into the bigger projects that you take on. Because you know better.

The third set that we’d like to give you is Understand The Transaction Cost.

Many times, some investors would just jump in to buy the property then they just try to hope for the best and try to resell. If there’s a little bit of profit, they get lucky. But this strategy is more like winning a lottery.

You’re just trying to pray and hope for the best. This is not really the strategic way to do things if you want to make the learning then earning in real estate your lifestyle. If you’re here to invest and reach the millionaire status as far as investing in real estate is concerned, you have to understand the transaction cost involved.

And when you’re trying to move property, there transaction costs involved. So, for example you want to rent out a dormitory, you’re going to have to think about the overhead expense, the maintenance cost, the management fee. All of these things, these are transaction costs involved. And if you’re not going be able to make money on top of all these transaction costs then you’re not really investing. You just have an expensive hobby. That’s it. But if you do know that transaction cost involved as far as flipping houses, you’re making a profit out of it, renting them out, moving the properties, you know.

If you’re very well aware and you don’t miss out on these fees because you understand and you’re highly familiar with them, and you make more and more as you go along then it could be very profitable for you.

The fourth tip we’d like to give you as far as making millions in real estate is concerned is Familiarize Yourself With Construction Cost.

If this is a highly relative term, you have to be at least familiarized with the basic construction so that you know how much the improvements will cost once you take a property. Say for example, you want to buy a piece of land with an improvement, that’s a house or a townhouse, whatever it may be or a building and it is a fixer upper.

And by then, way a fixer upper is a real estate term that we use when you find homes that are in need of renovation, it’s not in its best state and you have to think about the construction cost to you improve the properties’ overall facade and usability so you can turn the property to its highest and best use. You need to have some kind of basic knowledge as far as construction cost are concerned because if you go to a contractor and they try to give you a quote and you have no idea whether or not it’s overpriced, then the computation of the real estate, plus the construction cost, plus the selling price, equals the overall selling price could be so high that nobody wants to buy it already.

So, you need to have certain knowledge as far the basic cost in construction are concerned. Because there are actually two ways of handling a property as far as investment is concerned.

First is passively, wherein you buy a property and you wait for the prices to go up.

And the second is actively, where you introduce some improvements to the property so that it could be turned into its highest and best use and you can experience the highest possible returns on your particular asset.

And most of the time, for you to be able to experience the highest and best use of your property and for you to reap the rewards, whether you want to resell it or you want to rent it out, you have to introduce a few key improvements as far as construction is concerned. And if you’re not familiar with the cost, you might find yourself in a situation where you’re overspending on the property already without you even knowing it.

The fifth and final tip that we have for you is Have Several Exit Strategies.

The profit usually happens in the purchase and not just in the selling of the property. What do I mean by this? In normal lay man’s terms, of course you make a profit when you sell an asset.

But what most people don’t realize is that when you find a gem or a diamond in the rough, which is what usually happens in undervalued properties, you can actually turn it into its highest and best use and you can make a lot of profit out of it if you do the right things. This is the secret of so many millionaires who love real estate.

They usually buy a property which is either in distress or it’s just sitting there and has no value or it’s just a property that’s high in demand and it’s just an empty lot but they see that if you build a home on it, you can sell it for a particular price for so much more profit. The profit is in the purchase, if you see what it could be and not just for what it is, then you may have the vision for real estate and it could be profitable for you.

There are so many exit strategies that you can do when you’re able to acquire a real estate. You can either rent it out after purchasing it so you have rental income. You can either resell it for a profit. You can lease it for the first two, three years, then sell it later on, use the profits to buy several more because the property prices have gone up. And then you can do it until it compounds. That’s the best-case scenario. Or you can also buy a property, hold it for a long time, when the property values have gone up you can create an improvement. Ether it’s several townhomes or a building, subdivide it into condominiums or several townhomes whichever is the highest and best use for the property then sell it for profit. Or selling can come later on, lease some for the meantime then leave some for you and then develop it later on. There are so many other options you can do. But the bottom line is to have several exit strategies. The profit happens during the purchase, not just during the sale.

So, I hope today’s topic was able to give you a better idea as to how to make millions out of your real estate asset. There’s just so many ways. When you’re buying a property, deciding, planning for it, understanding the costs involved, assessing the location. There are a lot of really critical points. But I hope today’s topic was able to give you a better advice as far as what important steps are to look at so that you can be successful in your real estate venture.