Real estate investing is a powerful tool for wealth building. And it gets even better when you focus your investing on a simple, clear, exciting big-picture goal.
My favorite goal is to own a certain number of income properties free and clear of all debt.
What if you simply bought and paid off 10 income properties? Even if you manage them yourself, this relatively small number would be a very part-time, flexible retirement job.
While it will require some up-front work, you could reasonably accomplish this goal within 10-20 years if you dedicate yourself to it.
Although the goal can work with apartments, mobile homes, or commercial real estate, I would argue in most cases that single-family houses are your best investments. Houses are easier to finance, easier to understand, more flexible to get into and out of, and they have a large market of potential tenants.
The financial end result could look something like this:
$1,200 = Rent per month for each house
($500) = Expenses per month for each house
$700 = Net Operating Income per month for each house
$700 x 10 houses = $7,000 per month passive income
$7,000 x 12 = $84,000 per year passive income
Pause for a moment.
Would $84,000 of income coming in passively, consistently, year after year change your life? And if $84,000 per year doesn’t work for you, couldn’t you just add a few more houses until you hit your number?
If only a few hours per week doing administrative work took care of your financial needs (yes, that’s definitely possible with only 10 houses), could you figure out what to do with your time?
Time is, of course, the ultimate currency. If your wealth building goal can’t predictably give you more free time, freedom, and autonomy, then what is the point?
That’s the power of applying a simple, exciting goal to your real estate investing. And unlike many other paths to build wealth, your success is largely within your control.
So, what’s your big picture real estate goal? How many free-and-clear houses will you own? When will you get them paid off?
I wish you much success in your real estate investing!
Chad writes about real estate, money, and life at coachcarson.com. He is also a member of Metrolina Real Estate Investors Association (metrolinareia.org), which provides education, networking, and mentoring for real estate investing in the Charlotte region.