The trend of investing has gained much popularity over the years. Many people have started to become part of the investments market and have made their way to becoming millionaires. However, one particular question always comes up on the mind; which type of investment makes the most millionaires? Even though it is hard to compare one market from the other, it appears that the most successful investment market has turned out to be the Real estate market. Every year, more and more real estate investors are becoming millionaires while beginner investors quickly follow. This has led to many new investors consider real estate market to be its first choice. But first lets quickly discuss what real estate really is.
Real Estate Market refers to the market in which investors earn by investing in real estate or property. This real estate can be either land, building, house, apartment or any other category.
The main difference that a real estate market has from other investment market is that it is highly dependent on the demand. So, for instance, in case of stock market the prices of different shares will be dependent on a number of features such as inflation, growth rate, risk free rates, company’s performance and what not. However, in case of the Real Estate Market, the prices of the real estate are mainly dependent on demand.
So, if the demand for a land increases due to its prime location, for instance, then the value of that land will also increase monetarily.
Having described what real estate investment market is, we can discuss the different markets we should invest in. The most rising market in this sector is that of commercial real estate market. Since this market attract many business men, it makes all the more sense to invest in these market before the businesses take over. Let’s now take a look at number of ways you can invest the commercial real estate market.
Ways to Earn from Real Estate
There are several ways you can use to start your earnings from real estate. The first one is called 1) Appreciation of Property, which is simply holding property to sell at a higher price. The difference between the buying price and the selling price of the commercial real estate will determine your earnings from this property.
The pro tip here is to invest in an emerging market that you believe will rise in value. These can be markets that have a chance of becoming developed in recent years, are getting commercialized or have a chance of getting prime location in the foreseeable future.
The next method is to invest in such a real estate that generates a monthly/yearly income for you. We’ll call this method 2) Continuous Income from Property. This is one of the safest ways for investing in the real estate market, as now, not only there are chances of appreciation of your property, but a cushion of continuous income. An example can be purchasing an apartment to rent in a commercial real estate market.
Here, the tip is to again invest in a market expected to rise. If you plan on investing in a hotel that is already established, chances are it will only rise in value by a little margin. Hence, even though, you will receive a higher income, the cost and slow growth will make the investment a bad choice. Instead, consider investing in an emerging property that is expected to rise. And when it does, both your income and the value of your property will increase simultaneously generating a larger sum of profit for you.
Another method is to take on the character of a broker. Like in stocks, you as a broker can buy commercial real estate properties and sell them to other investors. This is one way of earning from real estate markets. We call this 3) Real Estate Traders.
The way to do this investment is to become an expert in recognizing attractive real estate properties. Once you identify, see how you quickly is it expected to rise while looking for potential customers.
The last step is to purchase or rent a smaller type of real estate within a commercial real estate. This will be termed as 4) Subsets within Real Estate. To explain this, consider the example of an educational institute. If you purchase a cafeteria within that institute, to both generate income and hold property to sell later, your investment will be categorized in this segment.
The tip here is to invest before there is much competition and to play a direct role in the management of your property. Only then, you can hope to keep the standard of your real estate and the income from it.
Success Stories from Real Estate Markets
We already have discussed the few investment methods you can use to invest in the real estate market. Now, let’s take a look at the few millionaires who reached their heights using these simple techniques.
From a simple janitor to a millionaire real estate investor Conlon started his career by purchasing an apartment from his savings. From our earlier discussions, this will be categorized as continuous income from property. Conlon made the right choice by investing in such a property that he knew will rise.
After that, Conlon finally got a job as a real estate broker that we have categorized as Real Estate Traders. From there, he continued to rise until he became a millionaire real estate investor in 1996. Therefore, by using the two of the most rewarding methods of investment, Conlon was able to pave his way forward.
Another leading example from the investment world is that of Charles Cadogan. Although, it might appear that his lineage is responsible for his success, Charles Cadogan actually made millions by just holding on to a seemingly dead property. Therefore, through his insight, he was able to identify an emerging market that had a chance of appreciation. And this strategy proved to be one of the few best real investment decisions of history to make him a millionaire real estate investor.
This young millionaire real estate investor has been quite successful by focusing on one thing; diversification of his portfolio. Torres started his career from a simple construction company. After his first successful investment in property, he has been continuously diversifying his portfolio to reap all the benefits of Real Estate Market. He even has invested in boutique hotels and even owns the top beach in Bahamas.
Gerald Cavendish Grosvenor
The 6th Duke of Westminister, Grosvenor depicts superior skills when it comes to investing and holding property. Even though, his history of real estate properties goes way back, Grosvenor has made quite some money using his insights. Like, Conlon, Grosvenor too follows the investment method Appreciation of Property. Currently, he owns about 190 acres of land next to the Buckingham palace in London. This alone, has made quite some value for the duke of Westminister who currently stand as one of the richest real estate investors.
Success stories are incomplete if we forget to mention Gary Keller in them. Like Conlon and Torrs, Keller had pretty humble beginnings in the real estate world. His very first success was selling five houses in first month. Therefore, we’ll categorize Keller as a Real Estate Trader.
After this success, Keller made it his goal to reach the company’s higher management as a VP, only to quit once achieved. This was because of his positive mindset to create a win-win situation for both customers and dealers; a culture lacking in his previous company. Therefore, he developed two new companies in partnership with Joe Williams, another real estate dealer. Out of the two companies, Keller Williams Realtor turned out to be a huge success for the partners.
This success was then translated and beautifully depicted in Gary Keller’s book The ONE thing, a must read for all investors interested in real estate market.
Other than that, here are a five top real estate investor books that you should consider for investing tips.
The Art of the Deal
Many people might agree or disagree on Donald Trump’s policies, one thing is for sure, he is an extremely smart real estate investor. Written and published in 1987, the Art of the Deal is one of the most favorite books among the real estate investor books. This is because of the easy and engaging way it is written as is often seen in Donald Trump’s speeches.
The book discusses tips and tactics that you can use to invest in real estate markets. One of the best features of the book was the real life examples that describes the negotiations and the dealing that often take place behind the curtains. Written in the straightforward way of Donald Trump, this book can teach you a few valuable lessons about investing in real estate and how to become rich quick.
The ABC’s of Real Estate Investing
Written by Ken McElroy, ABC’s of Real Estate investing is extremely beneficial for beginner level investors. This is because of its easy language that describes some of the most difficult investing terminologies in an easy manner.
The book is also known for its real life examples and pro tips that describe how you can turn a negative cash flow into a positive one if you are investing in the continuous income category. The book also teaches how to save your money using personal finance so that you can increase your investments.
A documented biography on three millionaire real estate investors who were previously unemployed, the Challenge is a must read for all beginner and smaller real estate investors.
The best feature about this book is that it provides you with an in depth analysis of the real estate market and a clear roadway to becoming the next millionaire real estate investor. Unlike many real estate investor books, The Challenge distinguishes itself with an original tune that was executed accurately.
Real Estate Loopholes
This book, written by Dianne Kennedy, Robert T. Kiyosaki and Garret Sutton, describes the various loopholes that exist in the real estate market. For instance, the book can teach you some valuable tax strategies that you can apply to maximize your profit making from this book. One of its main takeaways is the necessity of having a tax professional on your team as he it can cut your cost significantly.
Rich Dad, Poor Dad
Written by Robert Kiyosaki, a millionaire real estate investor, this book gives you a wider perspective on assets and money. The book is written in a story telling method with a comparison between two classes; rich and poor. It shows how the rich class views its money as compared to their counterpart.
The book is extremely fun to read and a must for real estate investors. It has a some of the best tips and strategies with real life examples that you can learn and utilize to start in real estate. Since the author too made most of his success through real estate, it teaches its readers just how they can follow his footsteps. Among all the real estate investor books, this is a must read for investors or non-investors alike.