+1 760.340.4277 customerservice@myfinancialcoach.com

Real Estate Investing 101: Tips and Strategies for Building Wealth Through Property Ownership

My Financial Coach > Know-More Blog > Real Estate Investing 101: Tips and Strategies for Building Wealth Through Property Ownership


We are pleased to present the guest article below by Sam Willis, a writer for the real estate industry. Sam Willis is a freelance writer that loves sharing his knowledge and expertise in residential and commercial real estate, as well as engineering and construction. He lives in Atlanta, Georgia where he enjoys spending time with his wife and researching real estate trends in his free time. Sam’s work as a freelance writer can be found on Building Product Advisor, a new construction industry resource site.


Real Estate Investing 101: Tips and Strategies for Building Wealth Through Property Ownership

Everyone has heard the advice: “Invest in real estate. Land is a scarce resource, so once you have some property, the price can’t help but go up.”


While real estate investment can undoubtedly be one of the best options for generating long-term wealth, it is no slam-dunk that every real estate investor will be successful. With this in mind, keep reading for some expert tips and strategies for how to most effectively generate wealth through real estate!

Remember That Owning Real Estate Requires Active Ownership

There are no sustainable get-rich-quick schemes out there. Building wealth takes hard work, time, and commitment.

However, too many first-time real estate investors think they have found the magic recipe to break away from this formula.

Buy a house, charge more for rent than the cost of the mortgage, and have a passive income stream indefinitely.

Unfortunately, these people get hit with a hard dose of reality early in the process. Property management, such as marketing to find tenants and staying on top of regular renovations, turns that passive income stream into a full-time job that becomes more trouble than it’s worth.

Therefore, invest in real estate with the right perspective. Even with the right kind of maintenance and occupancy rates, only expect to get about a 10% annual yield (best-case scenario) on the purchase price of the home. As time passes and you are able to add more properties and find management efficiencies, only then will you start to generate the type of wealth and income you initially envisioned. 

Understand Which Renovations Add Value To A Property

Although regular renovation is critical for securing the comfort, safety, and functionality of a property, remember that not all renovations are created equally. In fact, some projects are actually value killers and will recoup very little of the project cost in terms of increased resale value.

One area in which this is seen most prominently is in the kitchen. According to data compiled by Remodeling Magazine in their annual Cost vs Value Report, a minor kitchen remodel will recoup about 85 percent of project costs, whereas a major upscale remodel will yield only about 31 percent. A kitchen renovation simply is not going to add value if it requires a ton of work for comparatively little function, so avoid the temptation to have an old-school soda fountain installed. Instead, standard projects such as new flooring, updated crown moulding kitchen cabinets, and EnergyStar appliances are the way to go. 

Keep Energy Efficiency Trends In Sight

The trend toward sustainability is in full force right now, with no sign of slowing down. In fact, it is only likely to evolve more rapidly in coming years. With the United States government eyeing net-zero emissions by 2050, the economy has some serious work to do to get on pace to meet this goal.

While there is no way to know for sure exactly what may transpire in terms of government regulation, it is safe to bet standards, sanctions, and fines will increase toward energy efficiency. For example, California already has a mandate that all new homes must be equipped with solar panels, and it is realistic to expect other states to take similar actions to get in line with energy efficiency trends.

Therefore, it is incredibly short-sighted to build or renovate without diving deep into the most sustainable solutions possible. Incorporating solar panels and other types of PV technology are obviously great features to include in your property, but there are plenty of other ways to ensure sustainability. Make sure that the walls, floor, and ceiling all have sufficient amounts of insulation to create an air and moisture barrier and improve the structure’s R-value. Don’t settle for the cheapest products that will wear out in short order, but instead look into more durable opinions that will limit ongoing upkeep and maintenance resources. Compare aluminum vs vinyl siding instead of standard wood planks and slate vs composite roofing instead of standard asphalt shingles. Search for ways to add low-flow features to all of your plumbing fixtures.

Not only will these types of eco-friendly upgrades appeal to a more conscientious market, but they will reduce the likelihood that you will face emergent fines due to poor sustainability marks. 

Understand The Value Of A Good Tenant

There are all kinds of statistics out there showing how much rents have increased over the past decade. On the flip side, home ownership rates have gone down, with burdensome student debt and overall cost of living making owning a home unrealistic for more and more people.

This can add up to make the rental market feel like a gold mine.

While high demand amid rising prices is definitely attractive, really be careful about trying to squeeze that last penny out of tenants. Even if the market indicates that you could charge a little more for rent, having a dependable, trustworthy tenant will be much more profitable in the long run. Evictions, repairing damage, and marketing are all very expensive. Not to mention any unoccupied months with no rental income. 

Therefore, do everything you can to retain high-quality tenants. Perform some renovations that make the property feel more like home, such as interior stone veneer accents on the walls and elegant quartz countertops for the kitchen and bathroom. Send out little gifts for the holidays or special occasions. Pick a month to unexpectedly pay a utility bill. These are all small short-term costs that can help you achieve more consistent rental income over the long haul.

Get Started Today Toward Building Wealth In Real Estate 

Real estate is one of the most tried-and-true means of building wealth over time. However, like any type of investment, successful real estate investors manage their holdings accordingly to keep their portfolios in line with current market trends. For more ideas and inspiration on how to build wealth through real estate, check out the resources on My Financial Coach

While not specifically an investment advisor or manager, My Financial Coach is a great tool for getting the wheels turning toward a financially free future! The coaches can let you know if they see any “red flags” when it comes to how much you are paying in fees to your investment advisor. They will ask you about how exactly your investment manager is compensated for their time, and let you know if something is not in line. To remain an unbiased party, the coaches are not licensed to sell or manage products. Instead, they bring in Subject Matter Experts. These are third party firms who ensure that clients have an alternate investment advisor to go to in situations where the client’s current investment manager should be reevaluated.

In the case of investing in real estate, a coach can work with you to determine what the impact of purchasing an investment property will have on your personal financial picture as well as the impact on your existing investment portfolio. They can help you decide if one property is a better choice than another for your situation and why. They can help you plan ahead for unexpected expenses that come with home ownership and as a landlord or house flipper. They will design a plan that helps ensure unexpected events and repairs are provided for. They can also educate on alternate types of home loans that may be beneficial. They can suggest many kinds of real estate investing strategies that can refine your overall financial picture versus trying to do it yourself.

If this is your first time investing in real estate, it is a good idea to have an unbiased financial expert in your corner! Find a planning tier that works for you here.



Join Our Mailing List

We assemble only the most useful and practical resources on financial guidance for your education and convenience.

2 Responses
  1. When it comes to financing, explore various options to maximize your purchasing power. Consider working with lenders who specialize in investment properties and leverage strategies such as leveraging equity, using rental income to qualify for loans, or exploring creative financing options. A solid financial foundation and understanding of your budgetary constraints are crucial for long-term success.

Leave a Reply