Wealth isn’t just about the amount of money you have in your bank account; it's also about the value of your assets. One asset that many people overlook is their home. Only 36% of Americans recognizing the importance of making money in real estate live in rental properties.
If you're a homeowner or planning to be one in the future, this article has some vital information for you.
This blog discusses three easy steps to generate wealth with your home and a couple of bad financial habits.
STEP 1: Find out the actual market value of your home.
The first thing you need to do is find out the exact market value of your property. First, ask a few local real estate agents or brokers for a CMA (Competitive Market Analysis).
They’ll analyze the data and provide you with an accurate evaluation. If you have the slightest inclination that your property will appreciate in the long term, hire a professional appraiser to give you a conservative valuation.
Remember, when it comes to real estate, even conservatives are optimistic!
STEP 2: Analyze your financial situation.
You can do this by looking at your monthly expenses and income, then comparing it to the total amount you pay for your mortgage each month.
If you have more money coming in than being used, you'll be earning a good amount of interest on your investment without investing a dime of capital. It's easy to start making money with your home.
STEP 3: Save and Invest
Save the difference between what you earn and what it costs each month on your mortgage (if any). That's the money that will eventually turn into real wealth for you. You could take this extra sum of money and invest it in other commodities, such as stocks or bonds, called "trading up."
Bad Financial Habits You Must Avoid
You might think that you can do all these steps on your own, but this is not the case. You have to do a bit of homework first because you might make costly mistakes if you don't.
The biggest reason why most people don't take advantage of the benefits of owning their home is that they either:
a) Have bad financial habits and spend too much time investing in short-term assets or spending too much time and money on vacations. They can't even be bothered to pay the monthly minimums on their bills and end up losing thousands of dollars in interest each year—all because they want to play video games or spend time with friends. They refuse to focus on their financial situation.
b) Have no financial knowledge and don’t know what exactly to do with their money. They’re a bit like that old saying: "If you don’t know where you’re going, any road will get you there."
They just put the money in their savings account every month, investing nothing at all. It doesn't work that way. Money is useless if it’s not invested.
Get Professional Help at Rescomm Property Managers
Hiring professional property managers is a great way to start in real estate. If you have a property you can rent, our managers can take care of your property in the best manner.
For professional property management services in Orange County, ResComm Property Management is here for you!
We offer high-quality property maintenance and compliance services for both commercial and residential properties. Contact us here to learn more.