Can Real Estate Make You Rich?

This one question has broken the internet many times with more and more people trying to find its answer. The simple answer to this question is yes, real estate can make you rich. But, here’s the catch: not everyone who invests in property becomes rich. Real estate brings the same amount of risk as the good fortune.

Most people, who invest in real estate, end up having stress and empty bank accounts. Even after years of struggle, they are not able to build the kind of wealth they’ve dreamed of. So, how does someone become rich using real estate as a medium?

When it comes to earning wealth using real estate, there are three primary wealth generators that you need to invest in. We will discuss them one by one briefly.

Cash Flow

This is the extra income that you need to set aside each month or year to meet the requirements of maintenance of the property that you own. Cash flows are deceptive because when repairs can come in a random pattern. Moreover, the non-monthly costs like vacancy cost, capital expenditures, and regular expenses also add a lot of financial burden to your pocket for which you have to prepare in advance. For example, buying a house means to set aside your finances periodically like every month or year to make sure that once any expenses arrive, you are well-prepared for it.

Value Appreciation

In the world of real estate, the value of property is always on the increasing trend. However, the growth may be slow. In order to cope with it, you have to be familiar with the concept of forced appreciation, where you spend money on the improvement or upgrade of the property. As a result of the spending, the condition of the property improves that increases its value overnight. Once it increases to a significant level where you believe you can make a fair share of profit, you can sell it. Typically, the growth of real estate is quite slow, like 3-5%. However, you can make a return of 10-20% by using this method. For example, if you have purchased a house, you can improve its condition by minor repairs and the location will also come into play to improve the value of the property.

Loan Pay-down

When you buy a property for sale for instance, you either have to mortgage it or purchase using direct payment. If you have done the former, you have two choices to pay your loan. You can rent out your property and the tenants will pay the loan for you while building wealth for you automatically. A house can easily generate a handsome amount from rents. The other method is to pay the loan as you would have done normally.

These three ways can help you become rich using real estate as a medium. Just buying real estate is not enough, you have to be smart enough in your approach to use it as a tool to build wealth. There are other techniques used by real estate experts as well that can allow you to explore what works best for you in your favor. If you are residing in Pakistan and want to invest in a property where you can earn high returns, we would advise you to buy a house in DHA Lahore. A property in DHA Lahore is best for a number of reasons. First, it is the most developed area in the city where the property prices increase at a rapid pace as compared to other areas in the city, and second, it is secure for investment purposes because the area is administered by Pakistan army.