Increasing your cash flow through investing in property has always been a popular method for personal wealth building. Think about it: housing represents a consistent tangible need, and as long as people are buying it, it will remain one of the best strategies for increasing personal cash flow and building wealth.
The problem is that you can lose LOT of money using real estate if you do it the wrong way. Let’s look at a few ways to eliminate risk when using property investments to increase your cash flow.
Get an experienced Mentor
Those who are most successful in using real estate investing for increasing personal cash flow have learned what they know from someone else. VERY few people who are successful in using real estate for increasing cash flow got that way by the school of hard knocks.
This is because a “trial and error” education in property investments can cost thousands and thousands of dollars in what Dave Ramsey calls “stupid tax.”
So it’s crucial that you get a mentor who is trustworthy and competent enough to coach in you in learning about investing in real estate investing and increasing cash flow.
Know Your Financial Position
Before using real estate investing for increasing personal cash flow or personal wealth building, it’s important that you have things together on the home front as well. This means that your personal finances in order, your expenses are less than 70 % of your net pay and that you have enough emergency cash in reserves to cover your expenses for three months. It’s also good to have a consistent habit of setting aside the FIRST 10% of your income for investing.
This will empower you to focus on your investments to increase your cash flow without having to worry about whether you’re about to invest the mortgage money. Even if you decide not to have these things in place, get a clear and WRITTEN snapshot of your financial situation before you start making a move towards real estate investing for increasing your cash flow or wealth building.
Work on Making Some Predictions
Before you start working on investing in rental properties or properties which you intend on selling for a profit, get some practice by looking at properties on the tax appraiser’s website and driving around your city and getting a feel for what opportunities are out there. This will help you to build more confidence before you make a move to start investing to increase your cash flow by using real money. Much success!
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