Are you making enough money today to retire in the future? Most financial planners tell you to invest in their insurance plans, or unit trusts or other financial instruments so as to develop long term wealth. Why not consider doing the same thing for your own real estate? This method works if you are a low risk real estate investor and want to quickly pay off the mortgage on your own property.
This article will explain the simple low risk strategy to owning your own real estate quickly and improve your finances.
Firstly, reduce the amount of money you spend on credit. Financial institutions in America are earning lots of money because of the easy access to credit and debt. More Americans are in debt than in positive cash flow and use the debt to purchase depreciating consumer assets like cars, home stereos. The first thing you should do today is to reduce your credit and debt so as to reduce your interest payments for consumer items.
Tighten your budget each month and then spend your money more prudently and then tell yourself you are controlling your own business (your life) and are in control of your expenses of your family and your own expenses.
Secondly, draw up a monthly cash flow statement and analyze your monthly cash flow. Specifically take a close look at how much your monthly mortgage instalment payments contribute to your outgoings in your cash flow statement. Now instead of spending money contributing to more insurance policies or annuity, why not double your own mortgage instalment payments. This means practically that you get to own your own property in double the time.
Note that the downside of this strategy is that your monthly cash flow may be a bit tight but the key is to place the monthly payments on autopayment so you do not even get to hold onto the cash so you will not feel a sense of loss. Now that you know that you will be paying up your first property in half the time, spend your energy looking for a second real estate investment property. You are now a qualified real investment bargain hunter.
Thirdly, once you have paid up your first property fully, look for a real estate investment property with good rental yield. You want to use this property to generate good cash flow. How this works out in terms of a cash flow analysis is that you take the monthly rentals minus the mortgage instalments (inclusive of principal and interest) and see how much cash flow you can get from this real estate investment. Spend your time looking for a good property and it can make you more money in the longer term.
In conclusion, double paying your property mortgage instalments and reducing your consumer credit and debt is key to regaining control over your financial future. Take massive action today and start profiting from real estate instead of living from cheque to cheque.