Author: Constantin Gersing
There are plenty of possibilities to spend your money. If you like to enjoy your life you can spend your money on technology, cars and holidays. Meanwhile the rest of your money is chilling on the bank account it even increases because of interest rates or building loan agreements. Wow! So why of all things should you invest in real estate?
The answer is clear. Real estates are the most valuable and most sustainable assets which exist in the world. Meanwhile stocks and Bitcoins areincreasing and decreasing rapidly, flats will have less and slower fluctuationand they will give you a constantly passive income. Much more chill!
Furthermore you don’t need to worry about your pension because the monthly cashflow doesn’t depend on the economically and politically situation. Lots of people do always complain about their financial situation and they make government responsible for it. They forgot that they are responsible for themselves (unless the ones who really can’t change their situation). A reason for this misunderstanding might be that financial intelligence isn’t taught in school. Pupils learn how to calculate the weight of the sun and complex formulas but they don’t learn how to handle their money correctly. School is just a production of echos by the government.
In the following steps we will talk about how to obtain passive income basedon the example of real estate.
But before it’s necessary to change three habits:
- In live it is less important how much money your earn. It is more important how much money you keep. Responsibility about live related on finances is the savings rate. Therefore try to reduce your costs as much as possible. Don’t buy doodads you don’t need. Before buying something ask yourself if it is necessary. I advice you put this card in your wallet:
„DO I NEED THIS?“
- Learn to be emotionless related on financial issues. Emotions will make you think less rational. Being an investor is risky if you don’t know what you do. So make your own a specialist in this topic to prevent a big financial disaster.
- Learn effectivity and productivity. Hang out with people who inspire you. Who motivates you. Try to expand your network and learn from each other.
When you successfully changed your mindset you can begin with your Investments on real estate.
First step: We need to find an interesting DEAL. This is actually not easy because currently the request of real estates is quite high. Especially in megalopolis like Munich, Berlin, London, New York.. the square meter price is unbelievable high. There is no probability of increase of value. So we are looking for places with great expectations of increase of value. And we are looking for people who are rid of their flat and who want to sell their flat immediately. Lots of people are to lazy to renovate their flat so they sell them. And we hopefully buy them.
Second step:Analyzing, calculating, analyzing, calculating… . Make sure you have a high return on investment (ROI) on this deal. Check if everything is fine and lookfor eventually costs that can come up with this object. How is the condition ofthe building? How high are fixed costs? What needs to be renovated? Howhigh is the demand for your object? Which rent is realistic? Look for detailsand check everything twice or even more.
Third step:Save some money to finance your downpayment on the loan. At the momentthe interest loan in Europe is very low. But you can also look for an investoror work together with a real estate investor who is already a specialist. Two brains always work better than one.
Forth step:Renovating. But before we renovate our flat check your costumers. Students?Pensioner? Families? Here begins the most creative and exiting part. Look for things you can optimize and try to make a beautiful flat by using good and cheap sources (On the Buyback-Center you always will find some great furnitures).
Fifth step: Sell again or put the flat up to rent.
After a while you will have a certain amount of real estates which guarantees you passive income but usually to get into this point it requires a significant amount of upfront work.
With real estates you can change your lifestyle. You don’t need to work for money. Money will work for you and you can focus on things that seem important to you. You will have time and money to make a change in the world. Be a motivator for couch potatoes and go to places where help is strongly needed. Being financial free doesn’t mean to enjoy your live in a whirlpool, it means to have the possibility to create a better world and change the destinies of individuals and share your wealth.
Author: Constantin Gersing