Do real estate investors make money buying and selling real estate properties or through accumulations of properties?
The real estate business can be lucrative if you know how to play the game. However, many real estate brokers, agents, and investors tend to forget that sustainable income or real estate fortunes are built over time. There is no shortcut, no overnight success.
Real estate is the only business you can build from scratch with little savings while utilizing leverage. However, it does need commitment and constant learning to successfully bid real estate properties and close deals faster and at the right prices.
According to our real estate analyst and founder of Username Investment limited, one of the leading real estate companies in Kenya, true wealth can be built by accumulating real estate properties.
He further advises realtors that buying land and building the single or duplex house for renting in the long run help to generate a constant amount of income. However, while buying properties and holding for prices to rise to sell can be appealing, the process can be unsustainable because of the profit margin and the cost of making such transactions with clients. In addition, the time duration for real estate property to appreciate can take at least 3 years.
If you are an investor to build sustainable wealth over time, buying properties and holding is the best idea to consider. Below are some of the tips to consider;
- Look for properties that are in the most strategic location.
- Search properties in the neighborhood that has been underpriced, inspect, and bid on them. If you close on that deal, consider hiring an experienced renovating company to help you prepare for the occupancy of the next tenant.
- Use affordable mortgage to finance your real estate property and ensure positive cash inflow from the property.
- If your property is ready to occupy, ensure that you are familiar with taxation principles related to real estate so that you reduce your payable taxes every year.
- Ensure you do property due diligence at all times to ensure that you are buying a property that doesn’t have any issues.
In conclusion, real estate properties can be used to build wealth in the long run and generate cash flow in the short term. Success comes in when you save and buy more properties with cash inflow generated from the business.