There are many ways of becoming a real estate millionaire. It is possible to inherit lots of properties and thus become an instant property millionaire. This is not the norm and although a few people will experience this, several others will not experience such a bequest.
We are interested in those who slowly and strategically built wealth through real estate. We are even more interested in those who have documented or shared their experiences so that we can learn from them and apply their time-tested principles. We will unpack a few of those lessons that we have learnt from this select group.
Successful real estate investors are long term thinkers. They have a long-term perspective when evaluating investments and when planning their future. Many people think in short-time frames. Some even think daily believing that any day apart from today is not worth planning for.
If you want to be a real estate millionaire, you must start thinking in at least a 10-year perspective. An area may look unattractive today but what is the possibility in 10 or twenty-years time? Real estate investment has proven to be one of the most stable and rewarding long term investment vehicles even after experiencing short periods of downturn.
Real estate millionaires often operate like bargain hunters in other sectors of the economy. They love to buy properties when others want to sell. They love to buy properties less than its actual value. They love to buy distressed or discounted properties.
The interesting thing about this is that they aim to start making money on their property purchase from the start. When you buy a property at a discount, you make an immediate gain and also hedge yourself against any downturn in the market. It is a strategy for ensuring that you are properly positioned to make more money than the average investor the moment there is an upswing in the market.
Someone once said that many look but only few truly see. In real estate investment, this is very true. Experienced real estate investors can see opportunities where many can see nothing but problems.
This select group go out looking for strategic value that might not be obvious to the property seller. A strategic advantage in a property or piece of real estate could range from size to location or design. A strategic advantage is anything that is unique to the property that cannot be easily found or seen in any property in the same location. A strategic advantage could be a key difference in the property when compared to other ones that could make it a game changer when unveiled.
Another secret of real estate millionaires worth noting is their focus on investing in a tested market that has a long history of capital growth and appreciation. Those with very little knowledge of real estate investment often criticise or mock some investors investing in some highbrow areas on the premise that the amount they have invested or intend to invest in those areas could buy several lands or build several houses in other places.
What is hidden to the critic is that although some areas are very expensive today, they have a long history of capital growth and will certainly grow in the future except something out of the ordinary happens. These areas are tested markets where the demand is always more than the supply. Some of these areas can only be accessed by those with lots of money and the value will continue to grow. Real estate millionaires always ensure that they have a sizeable number of their properties in these areas.
Value can also be manufactured if you can see the possibility. Many real estate millionaires have been created through this means .The ability to look at a location or a property and see how to create value from it has always been part of the secrets of real estate millionaires.
This is one reason why refurbishing or renovating properties has always been a means of making money for those who understand it. A real estate investor could approach a property owner who has a derelict property in a strategic location but has no money to refurbish or rebuild it and offer to rebuild it for him or her on clearly agreed terms. By the time the renovation is completed the property is often distinctly different from what was there before. The property can now easily command greater value.
Finally, astute real estate investors are good at using leverage. Leverage is a means of maximising limited resources to gain significant advantage. Leverage includes using a small savings supported with proper documentation to raise money from the bank that you then use to purchase a property which ordinarily you would not have considered. However, if the property is sold, you’ll benefit as if you had put down the entire purchase price. This alone will boost the possibility of your making big money in real estate.