Andrew Carnegie famously stated that ninety percent of all millionaires became millionaires through real estate investments. This statement still holds true today, as many millionaires and billionaires continue to invest in real estate due to the numerous benefits it offers. More money has been made in real estate than in all industrial investments combined, making it a wise choice for young people looking to build wealth. However, simply buying real estate will not guarantee success.
Different strategies within the real estate sector will provide different benefits. For example, when you “fix and move houses” you are not paying a loan, so you won't get the benefit of the “down payment” or cash flow or a lot of tax benefits. Instead, turning around is mainly based on the “forced appreciation” that comes from fixing it. Investing in real estate can be a very successful undertaking, however, some real estate investors have run into trouble.
The only people who lose money on real estate are those who bought at the peak of the market and sold it at the wrong time or took too much capital out of their home, leaving no profit margin when they sold it. Real estate has an inherent demand, whether it is used to produce a product such as coffee or house an apartment or commercial space. Wholesaling is an active form of real estate investment in which you will find a good real estate offer, assign you a contract without having to buy the property itself, and then sell this contract to a buyer. When you invest in real estate, you can deduct several expenses from your taxes, including mortgage interest, property taxes, and more.
One of the main reasons millionaires invest in real estate is because of the passive income they provide. Real estate investment is one of the fastest and safest ways to build wealth and increase your net worth in this country. There are so many different paths and strategies you could take to become a millionaire through real estate that you could write a thousand books on the subject and never cover everything. The government decided long ago that it wanted to encourage real estate investment, so there are many benefits that help people substantially reduce their taxes.
It's a good idea to divide your goal into achievable milestones so that you can focus on them as you work to achieve the big picture, which for many people is financial freedom. When I talk about investing in real estate, I don't mean buying a home to live in. There are different strategies you can use to build wealth from real estate, and each strategy has its own benefits.