According to Casey Ryan Richards, becoming rich from scratch is a sweet dream, cherished by many people! At a time when the gap between the rich and the poor continues to grow, wealth is often singled out. It is true that, in our country, financial education is not on the curriculum of schools.
Yet money is simply a medium of exchange. It allows us all to acquire goods and services.
Of course, the more we have, the better and easier life is. Obviously, it is easier to be calm when the end of the month is not a problem, rather than when you have to count every euro to avoid ending up in the red. Casey Ryan Richards knows what it is, trust him, he has been through both situations.
Fortunately, there is a much easier way to get rich from scratch. This means to invest in real estate.
How to Invest Well in Real Estate?
According to Casey Ryan Richards, getting rich from scratch is relatively easy with real estate.
Be careful, simple does not necessarily mean easy. What Casey Ryan means by that is that there aren’t many steps to follow. In addition, you will see that, if you stack them, they can have a very powerful effect.
Keep in mind that you have four levers at your disposal to get rich with real estate.
Lever 1: Cash Flow
The first lever you need to use to get rich with real estate is cash flow.
The cash flow is the difference between your rental income (rents) and the expenses related to your investment (the monthly loan payment, insurance, taxes and duties, various co-ownership fees, etc.).
CASH-FLOW = RENTAL INCOME – EXPENSES
For a real estate investment to be really interesting, this difference must be positive. This is called a positive cash flow, or a profit, or a surplus. In the worst case, this result should be zero.
This means that your property earns you money every month, from the first month!
Lever 2: Appreciation of Real Estate
The second lever that will allow you to get rich with real estate is the appreciation of the property.
In other words, it is about the increase in value of your investment, over time.
It has been found that, over a sufficiently long period of time, real estate prices tend to increase.
Of course, there are periods of crisis, such as the subprime crisis of 2008 or the crisis linked to the coronavirus in 2020. But these market reversals are generally temporary and find their way back to growth sooner or later.
As a result, the longer you keep your good, the more it will appreciate. This rise in valuation is generally greater than inflation.
As a result, the more time passes, the more chances you have of realizing a nice capital gain on resale, which will seriously help you get rich.
Lever 3: Tax Advantages And Tax Loopholes
This third lever is really very powerful, yet it is too often ignored, especially by people who are just starting out.
The government has put in place several systems that optimize the taxation of a real estate investment. Of course, this is not without reason: we lack housing, and these tax advantages are therefore an incentive to build or renovate real estate, to meet demand.
The general idea to remember, in rental real estate, is that your rents are additional income, on which you will not pay taxes. This is valid even if you realize a positive cash flow, and this for several years.
This tax saving can, over several years, amount to tens of thousands of euros. This can go a long way in helping you get rich quicker than if you had to pay it back.
Casey Ryan Rutland is a real estate investor from Rutland. he is focused on rebuilding through partnerships with other investors.