How To Build A Property Empire Faster

Building a property empire is the dream of many people who go into business. The idea is exciting and it can potentially be extremely lucrative as well. 

The problem is that relatively few people ever achieve their dreams. Around three-quarters of landlords only own one property, aside from their regular home, meaning that only a small minority ever grow their portfolio to two or more. 

The problem is the sheer length of time that it takes to add more properties to your portfolio. Many people would love to grow their empires, but relatively few ever succeed. It’s just incredibly time-consuming and challenging because the sums of money required are so vast. 

Fortunately, there are some ways to build a property empire faster. Here’s what you need to do. 

Get The Best Deals

The first step is to get the best deal you possibly can. $200,000 might not sound much different from $205,000, but if you can negotiate the cheaper price, that’s an extra $5,000 in your pocket. Remember, for many people $5,000 is a year’s worth of savings, so it makes a big difference. 

Go Big

Many people who invest in property are afraid to go big. They believe that it’s only something that the big investors do. It’s not for the little guy. 

However, that’s not true. The bigger you go, the better your outlook will be and the more profit you will make. It’s not uncommon for many investors to pour everything they have into a single project so that they can reap the rewards long-term. 

For example, suppose, for instance, that you’re investing in a multi-apartment building for vacation rentals. Such a project would deliver tremendously high incomes compared to say, a single beach house. You might generate $20,000 or more per month from an apartment vacation rental operation, while you might only get $2,000 from a beach house, on average, per month. 

Bigger projects also reduce the impact of void periods –  times when the property is empty. Even if some tenants move out and you have empty units, there are others who continue to pay you rent, covering bills and mortgage fees. 

Buy Homes With A History Of Appreciation

Another strategy to make money quickly in the real estate market is to buy homes with a history of high appreciation. Properties might not seem particularly impressive now, but in ten years’ time, they could be highly coveted. 

Think about Apple stock at the end of the 1990s, before the launch of the first iPod. The company was languishing and nobody was particularly interested in buying it. The stock price was rock bottom. However, just a few years later, the situation turned around. And now, Apple is the world’s most valuable company and has been the top dog on and off for many years. 

You find similar trends in the housing market. Properties in certain areas languish before valuations soar rapidly, making owners incredibly wealthy in the process. 

Force Appreciation

Property moguls make some of their money from rents, but a lot of it comes from appreciation – the rise in the value of the underlying real estate. Therefore, getting the latter to increase is a major focus of people in the industry. 

But how do you get property values to rise? Well, one option is to simply wait for time to do the work for you. However, that can take many years, and most owners are looking to make returns faster. 

The other option, therefore, is to force appreciation. This is where you make improvements to the property designed to increase its value. 

For example, you might make a $5,000 investment in an apartment that increases its value by $15,000. You then sell the property after completing the renovations, pocketing a $10,000 profit. 

Forcing appreciation, though, is a risky business. It doesn’t always work out. Therefore, you need to be careful. Make sure that you invest in things that will actually generate a return. If in doubt, speak to an estate agent or an experienced property investor who has carried out similar projects in the past. 

Buy More Than One Property

While a single property can provide you with a decent monthly income, it probably won’t replace your regular paycheck. Rental profits of $400 per month are good, but they’re not great. 

Now imagine if you had net rental profits of $4,000 per month. That really would make a difference to your income. You might even be able to quit your day job and focus on property investing full time. 

Of course, to get to a figure like this, you usually have to buy more than one property. How many you need to buy depends on the size of your purchases, but five or more usually does the trick. 

If you need finance, remember you can always take out a second or third mortgage. In some situations, you can take equity out of the first property to make down payments on others. 

Conclusion

Becoming a property millionaire requires understanding the rules of the game. Sure, you need money, but you also have to know how things work. 

Making money in property comes from several sources. The first, and most obvious, is appreciation. The price you buy your property is often lower than the price you sell it since, over time, property prices rose historically. 

The next source of money is the profit you make on rentals. These could be money you receive from both businesses and individuals. Profits can decline because of costly repairs, but not usually.

You can also make money by leveraging the tax code. In some countries, for example, you can claim back property depreciation against your tax bill. 
As you build your property empire, you will naturally lean on one pillar more than another. What’s more, each of these money sources play off against each other. The higher the appreciation, the lower the yield, and vice versa. Over time, you’ll get a sense of how the market works, letting you find better opportunities as you go forward.