How to Start Building Wealth in Real Estate

Buying instead of renting:  It might sound strange, but home ownership can be one of the best tools available for saving money.  In today’s competitive loan market there are many loan programs that allow for the purchase of a home with very little money up front.  The bottom line is that you can use money that you are throwing away on rent to build equity in property that in recent years has increased at more than 10% annually depending on zip code.  For example, if you use your credit to buy a 300,000 dollar condominium, in three years you could reasonably expect it to be worth 334,183.50 dollars even with a very conservative appreciation rate of 3%.  Granted while high appreciation rates may not always occur, however even with single digit appreciation, coupled with the tax benefits that you get from owning a home you wind up with a tremendous long term investment So, rather than saving money to buy a home you should buy a home to save money.

Start with realistic goals:  Odds are that the first home that you purchase will not be your dream home, at this point in the process of building wealth in real estate it is much more important to get into something that will build enough equity to allow you to purchase something better in a few years.  If you could find an apartment where much of the rent you paid went into a fast appreciating savings account and earned 10%, but there were things you didn’t like about it, would you live there?  The answer is of course, most people would live in a place that was less than perfect if they could actually earn money for living there and have their investment gain be tax free up to 500,000 dollars. 

Consult with the proper professionals: Shop around until you find a professional REALTOR® with whom you feel comfortable, the best professionals will understand your specific goals and work to help you attain those goals.