{"id":71,"date":"2021-03-25T01:15:57","date_gmt":"2021-03-25T01:15:57","guid":{"rendered":"https:\/\/litpoodle.com\/blog\/?p=71"},"modified":"2022-07-18T12:57:24","modified_gmt":"2022-07-18T12:57:24","slug":"how-to-build-wealth-through-real-estate","status":"publish","type":"post","link":"https:\/\/www.litpoodle.com\/blog\/how-to-build-wealth-through-real-estate\/","title":{"rendered":"How to Build Wealth through Real Estate"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"71\" class=\"elementor elementor-71\" data-elementor-settings=\"[]\">\n\t\t\t\t\t\t\t<div class=\"elementor-section-wrap\">\n\t\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-15c79384 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"15c79384\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-2112adfe\" data-id=\"2112adfe\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t\t\t<div class=\"elementor-element elementor-element-14586612 elementor-widget elementor-widget-text-editor\" data-id=\"14586612\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.5.4 - 23-01-2022 *\/\n.elementor-widget-text-editor.elementor-drop-cap-view-stacked .elementor-drop-cap{background-color:#818a91;color:#fff}.elementor-widget-text-editor.elementor-drop-cap-view-framed .elementor-drop-cap{color:#818a91;border:3px solid;background-color:transparent}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap{margin-top:8px}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap-letter{width:1em;height:1em}.elementor-widget-text-editor .elementor-drop-cap{float:left;text-align:center;line-height:1;font-size:50px}.elementor-widget-text-editor .elementor-drop-cap-letter{display:inline-block}<\/style>\t\t\t\t<p><!-- wp:paragraph --><\/p>\n<p>Now, let <a href=\"http:\/\/litpoodle.com\/\" target=\"_blank\" rel=\"noopener\">LitPoodle<\/a>, our superdog, explain how real estate can build wealth through the story of dog investors.<\/p>\n<p><iframe loading=\"lazy\" title=\"How to build wealth through real estate\" width=\"708\" height=\"398\" src=\"https:\/\/www.youtube.com\/embed\/9k0EAZhd6dY?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture\" allowfullscreen><\/iframe><\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:embed {\"url\":\"https:\/\/www.youtube.com\/watch?v=9k0EAZhd6dY\",\"type\":\"video\",\"providerNameSlug\":\"youtube\",\"responsive\":true,\"className\":\"wp-embed-aspect-16-9 wp-has-aspect-ratio\"} --><\/p>\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\">\n<div class=\"wp-block-embed__wrapper\">Watch the video or read below to know more about the story \u2026\u2026\u2026<\/div>\n<\/figure>\n<p><!-- \/wp:embed --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>Dog Investors, Dog A and Dog B graduate from college and land jobs in Gotham city where they both earn exactly the city\u2019s median salary of $65,000 p.a. They both diligently save 10% of their incomes. They also receive the same 3% salary increment annually<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>But you know what, the median condo price in expensive Gotham city is $1M!! Dog A starts saving towards downpayment, aiming for 20% down. While Dog A collects its savings in a bank account, Dog B decides to invest in rental properties across USA (where the market is growing and the total annual return is 10%+), each time it collects $25K for downpayment.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>Guess what happens after 20 years? Dog A has saved $195K in its bank account. Meanwhile Dog B has built a portfolio of 7 rentals worth $750K &amp; $20K in the bank.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>Dog A isn\u2019t still able to afford that 20% down because the condo price has now jumped to $1.5M. Whereas Dog B is not only 4 times wealthier but also can afford a bigger condo!!!<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:columns --><\/p>\n<div class=\"wp-block-columns\">\n<p><!-- wp:column --><\/p>\n<div class=\"wp-block-column\">\n<p><!-- wp:image --><\/p>\n<figure class=\"wp-block-image\"><img src=\"https:\/\/clientdev.tagwebs.in\/lit-demo2\/styles\/img\/home-svg\/dog-a.svg\" alt=\"best real estate investment portal\">\n<p>\u00a0<\/p>\n<figcaption>Dog A<\/figcaption>\n<\/figure>\n<p><!-- \/wp:image --><\/p>\n<\/div>\n<p><!-- \/wp:column --><\/p>\n<p><!-- wp:column --><\/p>\n<div class=\"wp-block-column\">\n<p><!-- wp:image --><\/p>\n<figure class=\"wp-block-image\"><img src=\"https:\/\/clientdev.tagwebs.in\/lit-demo2\/styles\/img\/home-svg\/dog-b.svg\" alt=\"best real estate investment portal\">\n<p>\u00a0<\/p>\n<figcaption>Dog B<\/figcaption>\n<\/figure>\n<p><!-- \/wp:image --><\/p>\n<\/div>\n<p><!-- \/wp:column --><\/p>\n<\/div>\n<p><!-- \/wp:columns --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>How did Dog B do it even though they both started together and had similar incomes?<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:heading --><\/p>\n<h2>Build Wealth through Real Estate<\/h2>\n<p><!-- \/wp:heading --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>Because Dog B, through real estate investments, was able to harness the<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:heading {\"textAlign\":\"center\"} --><\/p>\n<h2 class=\"has-text-align-center\"><span class=\"has-inline-color has-luminous-vivid-amber-color\">1. POWER OF TIME<\/span><\/h2>\n<p><!-- \/wp:heading --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>Time is money. If you are not making money out of time you are wasting time. So Invest early.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>For e.g. the value of an initial investment of $25K growing @ 10% p.a.. after<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:columns --><\/p>\n<div class=\"wp-block-columns\">\n<p><!-- wp:column --><\/p>\n<div class=\"wp-block-column\">\n<p><!-- wp:image {\"width\":148,\"height\":361} --><\/p>\n<figure class=\"wp-block-image is-resized\"><img loading=\"lazy\" src=\"https:\/\/clientdev.tagwebs.in\/lit-demo2\/styles\/img\/home-svg\/after-5-years.svg\" alt=\"best real estate investment portal\" width=\"148\" height=\"361\"><\/figure>\n<p><!-- \/wp:image --><\/p>\n<p><!-- wp:paragraph {\"align\":\"left\"} --><\/p>\n<p class=\"has-text-align-left\">After 5 Years<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph {\"align\":\"left\"} --><\/p>\n<p class=\"has-text-align-left\"><strong>$40,263<\/strong><\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<\/div>\n<p><!-- \/wp:column --><\/p>\n<p><!-- wp:column --><\/p>\n<div class=\"wp-block-column\">\n<p><!-- wp:image --><\/p>\n<figure class=\"wp-block-image\"><img src=\"https:\/\/clientdev.tagwebs.in\/lit-demo2\/styles\/img\/home-svg\/power-of-time.svg\" alt=\"This image has an empty alt attribute; its file name is power-of-time.svg\" \/><\/figure>\n<p><!-- \/wp:image --><\/p>\n<\/div>\n<p><!-- \/wp:column --><\/p>\n<p><!-- wp:column --><\/p>\n<div class=\"wp-block-column\">\n<p><!-- wp:image --><\/p>\n<figure class=\"wp-block-image\"><img src=\"https:\/\/clientdev.tagwebs.in\/lit-demo2\/styles\/img\/home-svg\/after-20-years.svg\" alt=\"best real estate investment portal\"><\/figure>\n<p><!-- \/wp:image --><\/p>\n<p><!-- wp:paragraph {\"align\":\"left\"} --><\/p>\n<p class=\"has-text-align-left\">After 20 Years<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph {\"align\":\"left\"} --><\/p>\n<p class=\"has-text-align-left\"><strong>$168,187<\/strong><\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<\/div>\n<p><!-- \/wp:column --><\/p>\n<\/div>\n<p><!-- \/wp:columns --><\/p>\n<p><!-- wp:columns --><\/p>\n<div class=\"wp-block-columns\">\n<p><!-- wp:column {\"width\":\"100%\"} --><\/p>\n<div class=\"wp-block-column\" style=\"flex-basis: 100%;\">\n<p><!-- wp:columns --><\/p>\n<div class=\"wp-block-columns\">\n<p><!-- wp:column {\"width\":\"100%\"} --><\/p>\n<div class=\"wp-block-column\" style=\"flex-basis: 100%;\">\n<p><!-- wp:paragraph --><\/p>\n<p>Over the long run, most homes appreciate thanks to inflation. By investing early in appreciating assets, Dog B was able to capture the power of time.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<\/div>\n<p><!-- \/wp:column --><\/p>\n<\/div>\n<p><!-- \/wp:columns --><\/p>\n<p><!-- wp:heading {\"textAlign\":\"center\"} --><\/p>\n<h2 class=\"has-text-align-center\"><span class=\"has-inline-color has-luminous-vivid-amber-color\">2. POWER OF GROWTH RATE &amp; COMPOUNDING<\/span><\/h2>\n<p><!-- \/wp:heading --><\/p>\n<\/div>\n<p><!-- \/wp:column --><\/p>\n<\/div>\n<p><!-- \/wp:columns --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>Here\u2019s the difference between letting $10K in annual savings collect in a checking account returning 1.25% p.a. vs investing that in assets returning 10% p.a.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>After 20 Years<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:image --><\/p>\n<figure class=\"wp-block-image\"><img src=\"https:\/\/clientdev.tagwebs.in\/lit-demo2\/styles\/img\/home-svg\/checking-account.svg\" alt=\"best real estate investment portal\"><\/figure>\n<p><!-- \/wp:image --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>Because of its compounding nature, the importance of growth rate cannot be understated. Even a difference of a few percentage points annually can create massive disparities eventually.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>So every time you consider an investing, ask for the rate of return (or its growth rate) and use it to compare investment opportunities.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:heading {\"textAlign\":\"center\"} --><\/p>\n<h2 class=\"has-text-align-center\"><span class=\"has-inline-color has-luminous-vivid-amber-color\">3. POWER OF LEVERAGE<\/span><\/h2>\n<p><!-- \/wp:heading --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>You, the investor, get to keep all the appreciation in the property\u2019s value. <em>Many times this appreciation constitutes a significant portion of the return.<\/em><\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>Real estate investments allows a high degree of leverage (75 \u2013 80%)\u00a0 and when done carefully, they are stable enough too.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>For e.g. let\u2019s consider a house that has appreciated from $100K to $130K over a period of 10 years. And let\u2019s say the investor put in $25K ($20K for downpayment and $5K for closing)<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:image {\"id\":72,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} --><\/p>\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" width=\"1024\" height=\"407\" class=\"wp-image-72\" src=\"https:\/\/litpoodle.com\/blog\/wp-content\/uploads\/2021\/03\/Litpoodle-Home-Page-missing-image-1024x407.png\" alt=\"best real estate investment portal\" srcset=\"https:\/\/www.litpoodle.com\/blog\/wp-content\/uploads\/2021\/03\/Litpoodle-Home-Page-missing-image-1024x407.png 1024w, https:\/\/www.litpoodle.com\/blog\/wp-content\/uploads\/2021\/03\/Litpoodle-Home-Page-missing-image-300x119.png 300w, https:\/\/www.litpoodle.com\/blog\/wp-content\/uploads\/2021\/03\/Litpoodle-Home-Page-missing-image-768x305.png 768w, https:\/\/www.litpoodle.com\/blog\/wp-content\/uploads\/2021\/03\/Litpoodle-Home-Page-missing-image.png 1051w\" sizes=\"(max-width: 1024px) 100vw, 1024px\"><\/figure>\n<p><!-- \/wp:image --><\/p>\n<p><!-- wp:image --><\/p>\n<figure class=\"wp-block-image\"><img src=\"https:\/\/clientdev.tagwebs.in\/lit-demo2\/styles\/img\/home-svg\/home-value.svg\" alt=\"best real estate investment portal\"><\/figure>\n<p><!-- \/wp:image --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>Due to appreciation in value, the investor\u2019s equity has ballooned by $30K. Even though the house has appreciated only by 30% over 10 years, this $30K is a 120% return on the investor\u2019s original investment of $25K!!!! All thanks to power of leverage.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>Best of luck with your real estate investing!!<\/p>\n<p><!-- \/wp:paragraph --><\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>A quick intro on how lasting wealth can built through real estate and on how real estate estate is able to harness the power of time, growth rate and leverage.<\/p>\n","protected":false},"author":1,"featured_media":6014,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0},"categories":[8,144,139],"tags":[25,11,22,18],"_links":{"self":[{"href":"https:\/\/www.litpoodle.com\/blog\/wp-json\/wp\/v2\/posts\/71"}],"collection":[{"href":"https:\/\/www.litpoodle.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.litpoodle.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.litpoodle.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.litpoodle.com\/blog\/wp-json\/wp\/v2\/comments?post=71"}],"version-history":[{"count":31,"href":"https:\/\/www.litpoodle.com\/blog\/wp-json\/wp\/v2\/posts\/71\/revisions"}],"predecessor-version":[{"id":7258,"href":"https:\/\/www.litpoodle.com\/blog\/wp-json\/wp\/v2\/posts\/71\/revisions\/7258"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.litpoodle.com\/blog\/wp-json\/wp\/v2\/media\/6014"}],"wp:attachment":[{"href":"https:\/\/www.litpoodle.com\/blog\/wp-json\/wp\/v2\/media?parent=71"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.litpoodle.com\/blog\/wp-json\/wp\/v2\/categories?post=71"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.litpoodle.com\/blog\/wp-json\/wp\/v2\/tags?post=71"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}