Achieve true financial freedom with smart investments and hard work
Financial freedom: Everyone wants it. As Tony says, “Success is doing what you want, when you want, where you want, with whom you want, as much as you want.” True financial freedom means retiring to a breezy beach house or mountain cabin, relaxing and enjoying life while your real estate investments generate cash flow. Success at that level isn’t achieved overnight. You’ll need to learn how to build a real estate portfolio.
Intelligent investing creates a money machine that is the key to true financial freedom. And financial freedom can help you create a truly fulfilling life – whether you want to pursue your hobbies and passions, travel the world or give your family everything they deserve. Building a real estate portfolio can help you get there.
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How to build a real estate portfolio
Every reliable, profitable portfolio starts with finding quality properties. To lock down continuous cash flow and cover today’s increasing expenses, look for these qualities:
1. High demand, low supply
If a market is oversaturated with rentals, it becomes a renters’ market – that is, rents will decrease and owners must offer incentives to entice tenants. Buying property in areas with few apartments available and many renters leads to two effects that are good for you: renters will stay longer, because looking for an apartment becomes more difficult, and you can charge more for rent.
2. An appealing location
Nearly as important as the supply and demand in your desired area is the property’s location within that area. Is it in a walkable neighborhood enticing to young adults? Is it near parks or ponds that families would enjoy? Top school districts, safe neighborhoods and nearby amenities – all of these things allow you to ask for higher rent.
3. Minimal expenses
It’s vital to look for areas with low property taxes – they’ll be a major contributor to your expenses. You should also look for low homeowner association (HOA) fees and areas with lower expenses for the permits you will need. And while it can be tempting to look for bargain-basement “fixer uppers,” unless you’re an experienced “flipper,” these can be more hassle than they’re worth.
4. Increasing worth
Properties that will increase in value over time will give your portfolio stability and create more profit for you. This is called “appreciation,” and it can be hard to predict. Look for areas with growing populations, increasing investor interest and gentrification. Avoid areas with damaging weather, decreasing populations, school closures and job loss. And always be prepared for a recession.
How to scale your real estate portfolio
You don’t want to stop at just a couple of real estate properties. You dream big, and you want total financial freedom. Take your skills to the next level by learning how to:
1. Estimate property value
Learning how to value properties is a massive asset in the real estate investment world. It allows you to buy below market value, negotiate better and decrease the cost of an outside party. If real estate agents and brokers can do it, you can do it too.
2. Read financial statements
Warren Buffett said, “Accounting is the language of business,” and the world’s most successful investor definitely knows what he’s talking about. Reading financial statements is an essential skill for any businessperson learning how to scale a real estate business.
3. Calculate operating expenses
Operating expenses will be your biggest cost on any rental property – up to 80% of your gross income. Taxes, insurance and property maintenance are the most obvious, but don’t forget to budget for closing costs, property management fees and future vacancies.
This is the key to stability in an unstable market. When you diversify your portfolio by investing in different types of property, such as commercial and industrial or even in a real estate investment trust, you can minimize the negative effects of recessions and downturns.
Get help building a real estate portfolio
Tony says, “The path to success is to take massive determined action.” Are you ready to start setting goals and seeing results? There are tons of resources to help you. First, find a mentor or get a coach. Tony will be the first to tell you that his mentors and coaches got him where he is today. Top business owners, artists and athletes all had mentors as one point – and many continue to seek their mentors’ guidance even at the peak of their success. Tony’s Business Coaching and Real Estate Coaching are two forms of coaching that are specifically designed to take you to the next level.
Need inspiration from people who have experienced putting together their portfolio and have continued to reap the benefits? Business Mastery events bring together the best minds in business from around the world to learn, strategize and get energized for massive breakthroughs and success. As you’re discovering how to build a real estate portfolio, you’ll also learn leadership, communication and more. Because your portfolio is only as strong as its investor – you.