How Anyone can Build Wealth through Real Estate

For the average person (I know, you are anything but average!) real estate is one of the easiest ways to build wealth, and there is one key reason why… LEVERAGE! 

Leverage is a word I use a lot when talking to people about real estate. It’s the concept of putting down some money, and borrowing the rest. Investing in real estate the absolute way to leverage your money! 

When you purchase a home, the typical down payment is between 3-20%. When you put down 3%, you are borrowing the other 97%, but you are able to realize 100% of the appreciation of the full asset. So what does this mean? 

Imagine, putting 15K into the stock market… You get to enjoy the (hopeful) appreciation of your 15K, so if the stock goes up 10% in one year, you have a gain of $1,500. 

Now, if you took that 9K and put 3% down on a $300,000 home, and the $300,000 asset appreciated at 3% (the historical average), you would realize a gain of $9,000, a 100% appreciation of your original investment. 

Now, once you have done that once time, purchased a home as an owner occupant (meaning, you live in the home), you only have to wait 1 year before you can rent out that home and purchase another one using the same strategy. 

If you did this 5 times in 5 years, you could end up with assets worth over $1,500,000, appreciating at 3% a year, that is an equity gain of $45,000 a year all from $45,000 in an initial investment! This doesn’t include all the other benefits of owning real estate, like tax write-offs, equity gained thrown principal reduction each month, or potential cash flow. 

This is a simple example. There are other things to consider, like needing 6 months in reserves for a rental, a fund for potential repairs (because real estate is not a passive investment), but that all being said, there are HUGE upsides to using this strategy and these principles remains true. 

So what’s the next step now that you understand how you can build big wealth through real estate? 

LETS TALK! 

I just closed on my 3rd investment property and I've learned a lot! I understand the strategy and am doing it myself, and I would LOVE to help you build your wealth through real estate! 

Please forward this blog onto anyone you know who wants to build long term wealth, and is looking for a great strategy to do that! 

Your Utah Real Estate Resource, 

Emily Hayes