Living on rental incomes, financial independence, financial freedom… it can be said in many ways, but in the end it all refers to the same objective: To have the freedom to decide what to do with our time without money being a limitation.
Phases to live on rental incomes:
1. Capital accumulation phase: It is the period in which you earn income and save money. Normally, in this phase you can assume more risk/volatility by having income from an external source. All the money that you are accumulating (whether in the form of capital, investment, real estate or others) will be the one that tomorrow will allow you to live without working.
2. Phase of obtaining income: This is the phase in which you can live on rental incomes and you do not need to work to pay for your life. The income you obtain comes from the income of what you have accumulated in the previous phase. It is a time where you have to be much more prudent since the lifestyle is supported by investments.
3. Investment in real estate to collect rents: Investing in real estate consists of buying a home and renting it to obtain a month-to-month rent. In addition, under normal conditions, the price of the property appreciates over time.
We consider that investment in real estate is an interesting investment as long as it is to obtain a rental from a tenant, not to make use of it, nor with the intention of pure speculation.
Some PROS of investing in real estate for income living are:
• Some stability in the income stream from rentals.
• Little correlation with stock market fluctuations.
• Possession of a tangible asset that you could one day use yourself.
• Possibility of leverage (credit) with low interest.
In summary, we believe that investing in real estate, especially in New York, Miami a and Los Angeles, can be a good investment strategy for the rental phase.
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- 6 Thinks to understand before investing in real estate
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