The Four Wealth Generators of Real Estate Investing (4 Ways to Make Money in Real Estate)

This video will teach you the 4 ways to GENERATE WEALTH and make money through REAL ESTATE investing. Check out my Instagram: https://bit.ly/2RzrJbo (Investing Engineered)

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1. The Intelligent Investor by Benjamin Graham: https://amzn.to/2ThlHyJ
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3. The Book on Rental Property Investing by Brandon Turner: https://amzn.to/2Tfq1yE

Here are the four ways to generate long lasting wealth through real estate investing:

1. Capital Appreciation
a) Natural Appreciation
- Natural appreciation means the value of the home naturally tends to appreciate due to larger economic factors, like inflation, population growth, and supply and demand
- The short term is unknown, but in the long term, your property value is almost guaranteed to increase
- The investor (or property owner) has no control over this type of appreciation
b) Forced Appreciation
- Forced appreciation means that you as the investor have full control over increasing the value of your property
- By putting in work and making improvements, you can increase the value of your property
- This is how people who flip houses make money

2. Cash Flow
- This cash flow is simply the rental income you receive from your tenants each month if you operate a rental property
- Rental income is essentially the dividend income of real estate
- Rental income can offset or cover the entire cost of your mortgage and other monthly expenses
- Also, rental income generally appreciates over time at about the rate of inflation or higher, which increases your rate of return on the property value you paid for

3. Principle Paydown (Equity)
- Your loan is broken into two portions, being the interest and principle payments
- The principle is the purchase value of the home that you’re paying down
- So you increase your net worth each time you make a mortgage payment because of this principle portion
- In the beginning, the loan payments are primarily focused on the interest portion
- But as the loan matures, your payments become focused on principle paydown
- This increases your net worth faster and faster as the loan matures

4. Tax Savings
a) Capital Gains Tax
- When you sell a property for a profit, you will pay capital gains tax on the profit, which is only half of your normal income tax rate in Canada
- This makes for some excellent side income because you can save so much more than the amount from your normal 9 to 5 job income
b) Tax Deductions
- Many of the expenses in your rental or investment property can be claimed as deductions from your income
- These include, but are not limited to, mortgage interest, gas / water / electric bills, mortgage insurance, etc.
- These tax savings will not make you rich alone in real estate, but they are the icing on top of all the other real estate investing benefits I discussed in this video

Anyways, thank you for watching! If you did enjoy, please hit the like button to support my channel. Also, be sure to subscribe for more content on personal finance, business, and investing!

This knowledge was summarized within and obtained from Bigger Pockets’ “The Book on Rental Property Investing”.

Music by Joakim Karud http://youtube.com/joakimkarud

Sincerely,

Investing Engineered
Nick Peitsch, E.I.T.

Видео The Four Wealth Generators of Real Estate Investing (4 Ways to Make Money in Real Estate) канала Nick Peitsch Investing