How Does Real Estate Investing Work - 1 Percent Rule Real Estate

Renting

Renting involves finding a property, getting it in rent ready condition and marketing it for rent. The rental real estate investing strategy offers a number of profit opportunities. Cash flow is created when the monthly rental income exceeds the mortgage and other expenses. Long term wealth is created through appreciation of the property, the tenants paying down the mortgage, and tax advantages.

Imagine having 10 houses paid in full and rented for $1,000 a month for a monthly cash flow of $10,000. If the houses were only worth $100K each, you would have $1 million in assets plus a $10K per month cash flow before expenses. This financial position can be fairly easily accomplished in your own timeframe. Some people buy one or two houses per year and others buy a number of houses right away.

Lease Option

Lease options are created by offering a property for lease (usually for twelve months or more) with the option to buy. There are a number of profit centers with lease options to include income from the upfront option fee, monthly cash flow from the lease, profit from the sale when the option is exercised and tax advantages.

In conclusion, the answer to the question, "How does real estate investing work?" really depends on how you want real estate investing to work for you. Whether your goal is to build wealth, leave the 9-5, an early retirement, financial freedom, or quick cash, you can obtain it through real estate investing. There are numerous benefits to investing in real estate such as buying at a discount and creating instant equity, equity created through tenants paying down a mortgage, appreciation, cash flow, leverage and tax benefits. Determine your strategy -long term, short term or a combination of the two and make real estate investing work for you. MASTERCLASS