How Real Estate Can Build Your Long Term Wealth

build long term wealth with residential real estate

One thing you need to really think about before becoming involved with real estate investing is whether or not you’re prepared to be in it for the long haul. Real estate investing is a tremendous way to build wealth but you need to give your investment time to appreciate in value, which means it’s not going to happen overnight or even within a year. With the BRRR strategy (buy, renovate, rent, refinance) you’re looking at a five to ten year commitment to give the property a chance to grow in value while also paying down the principal balance. 

Before diving into real estate it’s really important that you and your significant other, if applicable, think about what you want your future to look like and what you’re both comfortable with in order to achieve those financial goals. If you’re looking for a quick turnaround, real estate investing isn’t it. House flipping is purely speculative and there are a ton of external factors that could lead to a net loss on the project. This isn’t a reliable method of accumulating wealth. The BRRRR method takes longer to execute but that’s what makes it an investment. It’s also what helps to mitigate the risks of the real estate market and why it can yield such high returns. Investments are all about the long haul – being patient in the present to secure the future.

Ideally, to be involved with this type of investing you would currently have a stable source of income that provides well for your family and you’re looking to invest in real estate to grow your net worth and have money to provide for your retirement, your children and family in the future. 

The goal with real estate investing for most people isn’t to replace the income you earn from your regular job, it’s to build a sound financial future that you and your family will benefit from. Yes, you will earn money from the cash flow from renters on a monthly basis, but the real earnings come when the property is sold five to ten years after the initial purchase. If you aren’t prepared to wait a minimum of five years to recoup your initial investment, this is likely not the investment for you.

There are many benefits when it comes to building long-term wealth but the biggest two are having your money work for you and financial security. If your money isn’t helping you solidify your financial future, then it isn’t working for you. Your money should be actively helping you create the future you want. Knowing that your initial investment is growing and appreciating every year is an extremely satisfying feeling. It provides a sense of security knowing that you have something tangible that you can profit from down the road. With each passing year, your investment grows as does your financial future. While the gratification may be delayed with real estate, it’s one of the most profound ways to build wealth to secure your future. 

If you haven’t thought about what you’d like your financial future to look like, there’s no better time than the present. What are your long term goals? Where do you see yourself, financially, in the next five to fifteen years? If you currently have investments in stocks, are you happy with the returns you are getting and are they enough to fund the life you want to be leading in the future? Taking a hard look at where you are currently and where you’d like to be are crucial for wealth management. Taking the time to really map things out will paint a picture and help you forecast what your future could look like if you begin taking action on your goals.

If you’re not an expert, real estate investing can seem intimidating and overwhelming. Luckily, there are ways for novice investors to take part in these lucrative opportunities if they invest with the right partner. Strategic partnerships allow both parties to benefit from one another with the end goal for both being the same – build long term wealth and financial security. Real estate investments aren’t flashy or glamorous but they are extremely effective at building up your personal wealth so that when retirement comes along you have the financial security to do whatever you please without being forced to work longer because your pension just doesn’t cut it.

Contact us today at info@artolinvestments.com with your questions.

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