Fun fact: almost 90 percent of today’s millionaires in the world built their wealth through property investment. And of course they didn’t do it overnight. Real estate is a venture that can best be described as the “ultimate get rich slow scheme.” You’ll be guaranteed wealth, but it will take time to get there.
Anyways, today’s article will act as a guide to all those who want a piece of the pie in Houston, Texas. We Buy Fast Houston Houses has in the past couple of days received so many questions about real estate, so we thought why not answer all those questions through our blog?
Generating Wealth through Real Estate in Houston, Texas
What’s the first thought that crosses your mind whenever you think about wealth creation through Houston, Texas real estate? A landlord collecting rent one door to the next? We thought so too. But here’s the thing; wealth creation through property investment can be done in more than one way. There are actually four key drivers, and we’re about to talk about each one of them.
We thought we should start with the most obvious one—rental income. Ever heard of that saying that goes, “cash flow is king?” Well, those who’ve been around the block for a while now coined that statement. They know rental income is the driving force behind portfolio growth. So if you want to quickly build your real estate portfolio, you have to make sure you’re constantly buying properties with a positive cash flow. The earnings that you get in one property should be directed to the purchase of the next. Use a rental property calculator if you want. All that matters is, you understand what needs to be done, and how to do it.
You’ll also hear some investors in Houston, Texas talk about how the real estate business is rigged. What they’re trying to tell you is, they have a love hate relationship with taxes. As a property investor in Houston, Texas, you’re allowed to deduct the following: Travel costs, depreciation, cost of repairs, mortgage interest, utilities, and the deferral of capital gains.
You’ll rarely find real estate depreciating in Houston, Texas or anywhere else in the country. Come to think of it, they often outpace inflation. What this basically means is, if you could hold it for a long period of time, you’ll be able to build more equity. And more equity equates to more cash. So many property investors in Houston, Texas have built their wealth in this fashion. Therefore, it’s a good investment strategy.
Leveraging real estate in Houston, Texas is one of those controversial ways of investing. Not so many people are a fan of it. For a typical home purchase, the mortgage lender usually requires around 20 percent as down payment from you, and they settle the rest. But some people prefer borrowing for, let’s say 4 percent, and then buy homes with an 8 percent cap rate. That means they’ll be getting a positive return from what they borrowed.
Those are the different ways of investing real estate in Houston, Texas. If you need help figuring out what’s the best strategy for you, kindly reach out to We Buy Fast Houston Houses. Good Luck!