How to Build Wealth with Real Estate

Wealth as a general concept is incredibly subjective. To some, it’s happiness, love, and security and to others, just good ol’ money. Only one of those, however, pays the bills. Money and wealth are often used interchangeably in everyday language, however, wealth is the total value of all assets owned by a person including money, not the other way around. While growing wealth gives you freedom, hoarding money, in the bank or at home, is the easiest way to deplete your wealth because the accumulation of money does not build wealth. Inflation, emergency expenses, and unforeseen circumstances – will ultimately dampen (or even stop) wealth generation unless there is an action plan in place to generate a stable passive income stream.

So how do you actually build wealth? By making good investments. The advice might be a little cliched, but that’s only because it works. At BuyProperly, we understand the need to build long-term secure wealth-generating assets for everyday investors. Before we invest, it’s important to consider a few important factors:

Why savings aren’t enough?

If you are yet to start putting your savings to work, then your saved money is likely to be resting in either of these two places:

Dresser drawer (we’re hoping the location keeps changing).

These are the assets hidden away under your mattresses, in murky cabinets, in bank lockers, or in other places where they generate zero interest. Dresser drawer savings naturally don’t add anything to your wealth apart from their original value, which even declines over time with some assets.

Bank account 

Bank account savings, on the other hand, generate an annual sum of interest. The only problem with this is, inflation will almost always outpace the average rate of interest in any economy. This is why even bank account savings can’t quite be seen as investments. No matter where or how you save, inflation will always catch up with you and eat into dormant money. Investing your savings into different assets/instruments is what’s recommended instead. 

Wise spending + wise investing = Financial Freedom.

Passive income 

Passive income is generated on assets that can be lent or whose market value tends to increase. Rent is the oldest, most trusted form of passive income. Owning assets like residential or commercial property that generates rent for you has been a time-tested way to invest sensibly.

(Note: Investments that generate any kind of income for you are always subject to market risks. It is wise to consider your risk tolerance before committing a certain amount to such an investment. A good rule of thumb to follow here is to buy assets using the money you definitely wouldn’t need within the next five years). 

Saving for your future 

Wealth generation is about more than being able to afford that Porsche you have your heart set on. Whether you plan for them or not, the future is full of new adventures, which often come with expenses. Long-term investments in real estate are a way of generating generational wealth that you can use to provide for your family. These investments can be used to support your retirement funds, your kids’ college funds, and any other money you’d like to set aside for the future. Well, thought-out investments in real estate can turn into a perennial supply of money – money that ensures your family can afford peace and comfort, no matter what uncertainties the future brings.

The Debt Factor

For a lot of investors, the first step to real estate investing seems intimidating due to the idea of a Mortgage. Having debt on your back essentially takes away from wealth, further, it exposes you to the possibility of inevitable long-term losses. 

According to the Mortgage Bankers Association, financial institutions in the U.S. hold about $10 trillion of mortgage debt on family residences. Taking debt has been promoted as the only way to start building wealth but it invariably leads to additional workload, stress tests, paperwork, etc. which eventually cripple wealth growth. In the long term, this effect piles on, leading to massive losses that can completely derail your investment plans. No matter where or with how much money you start investing, it is important to judge if the same returns can be achieved without taking on debt.

At BuyProperly, we restructured Real Estate, offering investors a better‌ ‌way‌ ‌to‌ ‌invest‌ ‌in‌ ‌property‌ ‌without‌ ‌taking‌ ‌out‌ ‌a‌ ‌huge‌ ‌mortgage‌ ‌fee‌ ‌or‌ ‌paying‌ ‌a‌ ‌fee‌ ‌to‌ ‌the‌ ‌realtor.‌ ‌With no entry barrier and no hassle of maintenance or tenants, you are on your way to saving enough for buying your own home sooner than you thought.

The need for diversification 

It is often said that you should not put all your eggs in one basket, especially when the eggs are as important as retirement savings, savings for your home, children’s education, etc. While every market investment is prone to certain risks, diversification in a secure portfolio is the best bet for stable growth. The ideal investment portfolio hedges risks against each other to ensure you take on the least possible risk.  Ideally, you don’t want to concentrate all your capital in one area. Imagine putting all your money in one house and then facing a 2008-like housing crisis. To benefit from diversification, an ideal investment portfolio should have real estate, stocks, EFTs, mutual funds, etc. Even within each of those sectors, there is further scope for diversification.

However, traditional real estate doesn’t let small investors diversify their portfolios. We at BuyProperly aim to solve this issue to ensure small investors can buy 10% of a house, along with 20% of a condo and 25% of a pre-construction investment unit in different geographies and thus, benefit from the true definition of diversification.
Here at BuyProperly, we leverage Artificial Intelligence to craft best-in-class investment opportunities for you so that you can invest in several Real Estate Asset classes. These meticulously picked assets work together to minimize market risks and generate excellent gains. With us, your money makes money so that you can make your dream retirement plans! contact us at [email protected] in case you have any other questions. 

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