Real estate investment offers
huge financial advantages to those who will learn the system. There are great
advantages to investing in real estate both as a money making business and as a
wealth builder. The financial revenue flows from several sources which are:
- The appreciation of your land and property values and
- The monthly cash flow you can earn by renting out residential, offices, or commercial spaces in a structure on your land.
Real estate investors can accelerate
their wealth building much faster than other assets, such as share, stocks,
bonds and tax-deferred retirement funds.
To become financially free,
Robert T. Kiyosaki (the Author of Rich Dad Poor Dad), recommends two assets
viz:
- Business and
- Real Estate.
He strongly recommends real
estate because the ricks in real estate are small compare with owning a
business. Furthermore, he recommends
that if you have a business, you should also own real estate with the name of
your business; in so doing you could easily leverage with the real estate.
Approaches to real Estate Investment
There are two approaches to real
estate investment which are
v Capital
gain and
v Cash
flow.
Capital Gain
Capital gain investors buy a
property at one price and then sell for higher price at a later time. This is
what most people do or think is real estate investment. This is like buying a
cow and selling it for a steak (beef). This is not the big deal. What you want
to do is buy a cow and keep it forever, so you can sell its milk.
Cash flow
In cash flow investing, you buy the real
estate, hold it and rent (lease) it for monthly income. Your aim is for revenue from rental income to
exceed the operating costs and mortgage payment. Here your money generates
income for you. Like you having a cow
that produces milk. You sell the milk and still keep the cow for it to
reproduce milk again. When it comes to real estate, you want to enjoy its
appreciation and its generation of income. You want capital gain and cash flow.
Cash flow investors occasionally flip to invest in bigger assets. When I say make real estate your business, I mean
you should invest for cash flow. That is how the rich are doing it. Real estate
income trumps portfolio income. The magic touch in real estate is your ability
to leverage. Next leverage
Leverage Key to Cash Flow Investing
In very simple terms, leverage is
doing more with less (by Robert T. Kiyosaki). Here, you invest your money in a
piece of real estate, and then you use this property as collateral to get loan
and invest the money in another property. This property must be a rental that
can bring in monthly revenue. You know what, bankers love to loan money for
real estate. This means that Real estate investors can secure bank loans and
make monthly payments as owners of the rental property. That is the magic to
wealth in real estate investment. All you have to do is keep control and get
certain percentage of your investment and re-leverage it to get more rental
properties. The whole idea is for you to
increase the velocity of your money using other peoples’ money. Here you
operate in a similar fashion like banks. How it works:
1.
Invest money into an asset
2.
Get the original investment money back
3.
Keep control of the original asset
4.
Move the money into a new asset
5.
Get the investment money back
6.
Repeat the process.
Most people don’t do this because
of lack of knowledge and fear. They think getting a loan to invest is bad.
Answer this question. Is there any rich person on health who does not leverage?
Know that your money in the bank is used by smart people for investment. Banks
don’t simply keep your money because it costs money to secure money, they move
it.
If you want to strengthen your
knowledge about the subject of money and the business world read the following
books.
ü Increase
your Financial IQ By Robert T. Kiyosaki
ü Rich
Dad’s Guide to Investing By Robert T. Kiyosaki
Start From Ibeju Lekki
Start your investment in real
from Ibeju lekki because that axis will be the New Lagos, a true Mega City.
Look at the projects underway: The international Airport, The Pan African
University, The Lekki Free Trade Zone, The New Sea Port, Two Golf Courses and
Several Upcoming projects. Furthermore, these projects will make appreciation
rate to be very high. Stop parking your money.
It’s been Akpadaka O. Peter (08160285780)
real estate consultant. Call for you need property anywehere in lagos information call. Thanks.

