you find an outdated property that's a "good deal" for $70,000 and put $10,000 worth of updates into the home such as: fresh paint throughout and update the flooring and light fixtures, the home might now be worth $100,000. Therefore, you would have $20,000 of equity month 1 of owning the property. Another way equity comes is through renting a property long term. Each rental check a tenant pays you, you pay your mortgage down, therefore, creating equity in the property month over month...a longer play than the first scenario above, but still, one of my favorites!! Appreciation Depending on which state/city/neighborhoods you choose to buy and invest in, appreciation (the increase in the value of the property over time) can be a huge play for you! In my experience and market that I personally invest in, I do not make appreciation a factor in my buying decision, but when it occurs, it is the "cherry on top" so to speak! This strategy will also be discussed in further chapters, so stay tuned to learn more about this real estate benefit. Leverage There are many ways one can leverage their investment in real estate. For example, you can buy a property using other peoples money, meaning your return can be, well, infinite! There are also ways you can leverage your equity in your personal home to get started investing in real estate through a HELOC (home equity line of credit). This will be discussed in more detail later on as well.
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