Is building long-term wealth your goal as a real estate investor?
It should be. A lot of people will buy a piece of property and quickly get frustrated that it’s not earning them the amount of money they expected right away. That’s because real estate investing requires a long term plan and a lot of patience. You actually begin building wealth as soon as you close the deal on an investment property, and you continue building wealth – even if it feels like you’re only losing money early on in the process.
At HCM Property Management, we do more than provide residential property management for single-family homes in Irvine and the surrounding areas. We also help investors build wealth through buy and hold real estate investing.
Whether you’re looking for your first investment property or you’re interested in growing an existing portfolio, we’re here to provide some insight on how to make your investments more profitable.
Here’s how we help property investors like you build wealth.
First, Irvine Real Estate Investors Need a Set of Investment Goals
We know your ultimate investment goal is to make money, but real estate investors have multiple ways to do that. You’ll need to be specific when it comes to setting investment goals.
There’s passive investing, which allows you to establish a low-risk investment portfolio with great tax benefits. There is also active investing, in which you might buy homes that need work and flip them to make a profit or rent out short-term vacation properties.
We like to advise investors to build wealth by purchasing and holding rental properties. We think long-term rentals are the best way to earn cash flow and ROI with increased appreciation.
Next, Look for Profitable Irvine Investment Properties
If you’re interested in building wealth, you need to buy the right property.
Some rental properties will cash flow right away, but with housing prices what they are in Irvine, that’s unlikely. You may not see positive cash flow for several years. That’s to be expected. You own a valuable investment that’s only going to appreciate while your tenants pay down the rent. As we said earlier, you started earning money as soon as you closed the deal.
The best investment properties for wealth-building, we believe, are single-family homes. You’ll have steadily increasing property values, a strong pool of tenants, higher rents, and the ability to increase rental value by making periodic upgrades and improvements.
Your most profitable rental property will be well-located, in good condition, and attractive to tenants.
Leverage what you Own to Build Wealth
Building wealth with real estate does not always mean acquiring property. Maybe you’re moving out of one house and into another. Instead of selling that house you’re leaving, why not hold onto it and rent it out? This gives you an opportunity to earn rent and hold onto a valuable asset.
You can also build wealth by utilizing a 1031 exchange when you decide to sell an investment property. Instead of pocketing the proceeds, re-invest the money into a new property and you’ll defer the capital gains taxes you would otherwise owe on the sale. Then, you get to continue earning money with new and more profitable properties.
If you’re thinking about your own path to wealth through real estate, we’d love to be part of your journey. Please contact us at HCM Property Management, and we’ll talk about your opportunities in the Irvine rental market.