Most people aren’t able to purchase homes with cash. In most cases, people have to set aside money for the down payment and take out a mortgage loan. The length of the typical mortgage loan is 30 years. While there are plenty of people who live in the same home and pay it off, there are others who prefer to move around and buy new homes. If you don’t have the education, it might seem difficult to fathom purchasing multiple homes. However, there’s a strategy that allows you to purchase many homes and build wealth. It’s called real estate investing. In this example, you’d serve as the landlord for rental properties.
1. Purchase a decent starter home.
Since it’s your first of many homes, purchase a modest starter home. Keep the price as low as possible. This isn’t the home where you’ll get all of the bells and whistles. In fact, it’s okay if it’s not the cream of the crop. Get a home that could use a bit of sweat equity and do your own upgrades over the span of two to three years. Do your research. It’s best to purchase a home in an area where the property values will potentially increase over time.
2. Rent it out and move to another property.
Once you’ve done the work involved in upgrading the property, it’s time to put it on the market for rent. It’s a good idea to use a property management company to help you with the details. Things can get a little sticky and complicated if you manage the property on your own. While there are plenty of people who manage their own properties, it’s a lot easier to go through a company and pay the extra fees.
As you move to another home, you can choose to upgrade and make it a home you stay in for a few years. You can also do the same process of purchasing a simple home to spruce up. As the renters pay off the mortgages for your various homes, you’ll develop a significant amount of wealth. It’s a good idea to use wealth management firms to help you with the process of managing all of that money in the best way.