Everyone wants to be independent, and while there are some ways to get there, the best way s real estate. It is one of the most lucrative ventures, but the thing is financial freedom is different from everyone. For some, it might mean a good job that earns more money than they need, allowing them to buy better items as a result. For other people, it is being able to live without debt bothering them, giving them a peace of mind. Some want a number to be that, a nest egg that they desire so that they can live the rest of their lives without money running out. But, there are those who believe passive income they cant’ outlive is the answer, and they let their money work for them without putting in the hours.
You’ll need to take on the financial freedom that is based off what you can buy in terms of houses in a given year, and how many you should buy annually. If your goal is the dream lifestyle, you’ll need to work out what this would cost, if you’re looking to replace an income, the freedom number is a pre-taxed income, and then you can calculate how many properties that you’ll need to achieve this, and it’s dependant on the investment strategy that you’ll use.
To make a good strategy, is a good thing and you should know that there are many different strategies to get financial independence, and you can do this in the short-term, as in the case of flipping houses, but there are others that work better, and we’ll talk about what those are.
First is cash flow through properties, which is rentals basically. You need to look at the freedom number based on the relation of the rental property. For example, if you want to do 60K in a year, you need to have 5K a month, and if it does earn you 500 a month after expenses, that means you need 109 properties to do this.
Then there is buying the property outright, but there’s no mortgage or interest. You purchase properties, appreciate in value, and determine what you sell off and what you keep, and from there, you can rent out, renovate, and update.
You can also live off sales profits, which is purchasing a home, and while your focus is how much they don’t bring at the moment, it doesn’t matter. The idea is to let them grow in value so that when you retire, you sell them off and live that. you’ll need to plan how much property you need to purchase though.
Then there is living off equity, which is similar to the last one, but instead of selling to get the funds, you borrow an equity loan against the current one that you have, so you rent them out, and the more you amass, the more rent that trickles in, growing the equity, and from there, if you borrow against, you can live off this.
Finally, there is owner financing, where you charge the buyers and interest over the course of a period. It has shower payment period s than your normal mortgage, but with higher interests, so instead of selling off properties, you get to enjoy the accrued interest that’s there.
The best thing to do is to figure out what works for you, whether it be one singular one, or a combination of both of these strategies. Whatever it might be, you should make sure that you’ve got the freedom number as the guiding light for this, since this will show you how many properties you can live off each year.