There are a number of different ways that you can store up money and provide yourself with residual income. Some people like to create content that is shown online (such as writing for Seekyt). Others get started in an MLM company, and still others take the tried and proven method of investing in stocks and bonds. If you ask people though, many will say that they want to invest in real estate. This method of accumulating wealth and increasing your net worth can be a great way to make money. But it does take some planning.
Hire a Realtor
Before you even get started you will need to hire a realtor. Sure you could do all of the work on your own, but why would you want to waste your time? A realtor is going to save you money by showing you where you can bargain. She will find houses that fit your criteria that you didnt even realize were out there, and she will be your eyes and ears when you are busy with other things. A realtor is a must when buying and selling real estate.
Hire an Accountant
If you are buying a house to live in, you dont need an accountant for that. But if you are planning to make money off of the house, you certainly do. Without one you will miss out on a lot of the deductions and tax breaks that come with being a landlord. Your accountant will be able to maximize your taxes so that your rental income is barely taxed. Keep in mind that an accountant will cost you money, but you will be surprised at how much he can save you in the long run.
Know the Pitfalls
Owning property is not a job for those who dont want to work. A big misconception is that you will be able to buy a property, find a renter, and everything will be just fine from there on out. The truth is that you will likely find a property, and it will be way too expensive to make renting it out worthwhile. So you have to find something cheaper. A cheaper property, naturally, is an older property and you will have to make repairs, updates, and service calls. On top of that banks dont like to lend to people if they cant prove their income, so if you are making all of your money from rental properties, you will have trouble getting a loan.
Understand Your Risks
Along the lines of pitfalls, there are some huge financial risks that you are taking. More than likely you will not be able to find a tenant right away. While your property is sitting vacant, you still have to pay the mortgage on it even though there is no cash flow. In addition, if you try to turn off the utilities you may end up dealing with broken water pipes, flooding, animal infestations, and other problems. When you do get tenants, things will wear out. You will have to replace furnaces, appliances, water heaters, and many other things. After a tenant moves out there is cleaning to be done and repairs to be made. When all is said and done, you may not be making any money on the property for several years after you buy it.
Making Money on the Side
Buying rental properties is not a bad way to maximize your money. In fact, it is a great way to earn money on the side and to maximize your tax deductions. However, if you are going into it thinking it will be an easy way to sit back and watch the cash roll in, you will be in for some rude awakenings. Read heavily on the subject, and keep a lawyer in mind before you decide to invest in rental properties.