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Today’s post comes from Jen, a fellow S&S reader. Check out her tips for making your fortune investing in property!

Turn Your Measly $1,000 Into A Magnificent $1 Million By Investing In Property

It might sound a bit far-fetched to think that you could turn a $1,000 investment in property into $1 million. But this is something that regular people have achieved, and something you can achieve too.

Take Carl Berg, for instance. Berg, now 73 years old, grew up in New Mexico. At the age of 10, his father died, and he and his mother had to survive on her small income. Berg decided at a young age that he was going to go into property investing. He began working at a hotel, hoping that he would brush shoulders with people who would be able to offer him work in the mortgage and banking business. He got a job in a real estate business shortly after graduating from college and began honing his skills. Starting with practically nothing, Berg rode on the back of the success of Silicon Valley, buying properties he thought that new wealthy tech professionals would like. Now he owns one of the largest real estate holdings in California worth millions of dollars.

Berg’s story is by no means unique. Many people have gone from humble beginnings to become extremely wealthy through property. So how can you emulate them, even if you only have $1,000 in the bank?

Starting Out

Here are a few ways to get started.

Use Joint Ventures

If you’ve only got $1,000 in the bank, then one of the best ways to get into the property market is to invest alongside others.

There are many different ways of doing this. But one of the most effective for those just starting are setups where the rich person provides the money, and the person without much money does the day-to-day administrative tasks. Rental profits are then split between the two by negotiation.

As a result, if you’re cash-poor but have a lot of time on your hands, you can often get your foot in the door by going in jointly with another person or group of people. This gives you nominal ownership on paper, alongside an outsized shared in the profits.

Try REITs

REITs are a type of real estate investment vehicle. They enable investors to buy small chunks of properties similar to shares. There are strict rules governing REITs, so you know that when you buy one, you’re getting something that has had to meet specific requirements.

REITs are particularly useful if you suspect that a particular segment of the property market might do better than others. Rather than being restricted to buying just residential properties, REITs help cash-poor investors buy stakes in commercial estate too. If you want to turn that $1,000 into something much more significant, keep an eye out for REITs that focus on commercial investments that are likely to grow in value dramatically.

Invest In Property Investment Companies

Property investment companies are similar to mutual funds. Like mutual funds, you give them money, and then they decide where that money should be invested to make the most money. In the process, they take a cut of the returns to finance their operations.

Property investment companies are ideal for people who do not have much knowledge of the property market but want to make money in it nonetheless. The great thing about these companies is that they are usually willing to accept small investments from cash-poor buyers, meaning that you can get your foot in the door without having to stump up lots of cash.

Consolidating Your Portfolio

Once you have a solid start, you can focus on consolidating your portfolio. Here are a few ideas for you.

Diversification

Once you’ve started generating returns on your initial investment, you need to think about how to consolidate your portfolio. One of the best ways to do this is to diversify to make sure that you’re not exclusively exposed to risks in any particular market. But how do you do that?

Sites like https://www.rumah.com/apartemen-disewa/di-area-surabaya-idji29 provide valuable insights. They show that the property market is a diverse place, with many different sub-markets globally. Investing in different markets is one of the best ways to protect yourself and find opportunities for higher returns.

Remember the 2008 market crash? Most of the fall in prices happened in the US where the majority of US citizens parked their wealth. The financial ramifications were extreme, and many people lost everything. They wouldn’t, however, have suffered so severely had they invested a portion of their money overseas in uncorrelated markets.

Start An Independent Investing Company

Investment products are great for beginners, but they cost a lot of money, especially over the long term. $50 spent today on fees is potentially $500 lost ten years from now.

Carl Berg decided that he didn’t want fees eating into his profits. So he decided to go it alone, building his own real estate investment company from scratch.

Invest In Your Own Backyard

Diversification is essential, but nothing beats local knowledge applied properly according to https://www.gq-magazine.co.uk/article/investing-in-property-abroad. As a local, you’re already at a considerable advantage compared to people who live outside the area. Over the years, you get a sense of what is good and bad about a particular location, and what might change in the future.

If you know that a new office complex or shopping mall will be arriving in your area, then there’s a good chance that local property values will rise. Similarly, knowing about the quality of transportation, local schools, and attractions helps you to decide whether your next property investment is good value for money.

Buy Now When Rates Are Low

If you want to take on a mortgage to fund your real estate investments, the time is now. Because of the overall strength of the economy, central banks are raising interest rates for the first time in a decade. In the US, rates are already at 2 per cent, up from zero just a couple of years ago. And plans exist to continue raising rates until they exceed 3 per cent, unprecedented since the Great Recession.

Savvy investors realize that they need to get ahead of the game and take on fixed-rate mortgages today so that they don’t have to pay higher rates of interest in the future. Central banks are going to raise rates, regardless of what happens in the property market. So lever up now to turn your $1,000 into $1 million.