If you’re looking to gain long term financial security then its best that you invest in growing your net worth. There are quite a few options to do this. You probably already have a 401(k), RRSPs or other investments – which is a good place to start! But your net worth is all about increasing your assets and decreasing your liabilities. And there’s no better way to do it than through a fixed asset – property.
#1: Generate Passive Income or Pay Off Your Mortgage
When you invest in real estate you can decide how you use the property to generate an income. Either use it as a steady supply of passive income or simply forego having to repay your mortgage. If you decide to keep profit from the rent you can save that so it bears interest. Or if you use the rent to pay off the mortgage on the property you’re able to take on other projects that could help you increase your net worth.
#2: The Value Of The Property Will Increase Over Time
Another great reason to invest in real estate is that over time it increases in value. As long as you are maintaining the property and investing in its upkeep it’s reasonable to think that it will increase in value, significantly. That way you can make a decent profit when you decide to sell.
Keep in mind that real estate is cyclical. This means that in order to realize the best gains you’re going to have to sell at the right time.
#3: Leverage The Equity You Have To Buy More Investment Properties
As you pay off the mortgage on a property you increase your equity. Once you’ve paid a property off in full, you can use that as leverage to get additional financing for another property. Without having to fork out any cash.
If done correctly this action can be repeated frequently and you’ll end up with a quite a few assets – increasing your net worth.
Remember that creating net worth is a long term goal and that investing in anything carries some risk. Before you dive into any of these tips be sure to discuss it with your trusted financial adviser. If you’re interested in buying the ideal investment property, contact us so we can help you.