Financial independence is different for everyone. Some think of it as having a steady cash flow of an amount that you need to survive the year or month and to some, financial independence means having more than one needs so that he/she can enjoy the dream lifestyle.
Even though we can’t agree on what financial independence means, we certainly can agree on the fact that real estate is a solid way to achieve financial independence.
If done right, real estate can make your dream lifestyle happen. But you need a solid strategy for that.
Here are the 3most effective strategies for your real estate venture which you can implement to meet your financial freedom.
1.Ensure cash flow through passive income like rental properties
Generating passive income through rental properties is of the most popular strategies out there. The popularity of rental properties bringing cash flow reached its peaks in the early 20th century and it is still holding its position. Till this day, it is one of the easiest and hassle-free ways to ensure you can pay your bills on time.
But being financially independent is much more than just paying the bills. For that, you need to look at your freedom number.
“What is the freedom number?”
Say, you need $200,000 a year to lead your dream lifestyle. This $200,000 is your freedom number.
To reach this number, you need to invest in a specific number of properties. You can find the number easily. Say each one of your rental units nets you $300 per month, after paying all the expenses. So, each is adding $3,600 to your income annually.
Now, how many units like this will you need to meet your desired freedom number (which is $200,000)? About 56 units.
Take the goal of investing in 56 units seriously and the freedom figure will come running to you.
2.Just buying the properties
This is very similar to the last strategy we discussed. However, in this situation, there’s no interest or mortgage to contend with. This cuts down the expenses and saves a lot of money for the long run.
Using this strategy, you can easily build up your portfolio which will allow you to appreciate the values. Once you buy the properties, there are a number of directions you can go to. You can either sell some of them while keeping the rest or you can rent them for constant cash flow, it’s your decision.
Also, if you feel like it, you can rent, upgrade or renovate the properties to increase its value.
3.Wait for it & then live off it
This one is quite the opposite of the first one we discussed.
Yes, you purchase the properties as I explained for the second strategy. But instead of looking forward to the instant cash flow, you wait. You hold on to the properties until their prices increase. This way, when you retire, you have some valuable assets that you can sell and the profit at that time will be enough for you to re- invest into other passive investments.
For more info, please click here: Best Real Estate Strategies