One of my strategy to become a millionaire is through properties. I wanted to accumulate a net worth of 1 million in properties. My strategy is to get 5 properties with good rental yield (8% and above). I will be living in one of this property. So if one property is average 200K, 5 property will be 1 million. I will be able to generate income from the property.
So my estimated income generated from rental will be 200K X 4 X 0.08 = 64K per year (X 4 because only 4 property will be rented out). However in the initial stage I will not be able to put the rental income into my pocket because the income will need to be used to offset the installment. I plan to accumulate all my 5 properties within 5 years time, 1 per year. Right now I own 2 properties.
One of the property that I lived in, and another one is rented out. So I have another 3 to go. My strategy is to settle the property that I lived in as fast as possible. I am targeting to settle that in less than 5 years time. For the rented properties I plan not to settle if fast at the moment as I need to focus on the property that I lived in first. Sounds easy huh. Actually not as easy though. First you need to have enough monthly income for you to eligible to get loan from the bank. The bank will only borrow you money when you don’t need it. Then you may need certain amount of down payment when you buy each properties.
You also need to do a lot of research and familiar with the area that you are targeting for before you decide to get the property. Buying a property is a life long serious commitment as it may takes you years to pay back the installment. So don’t act bluntly. Another problem can be, what if you cannot get rental? So hot location is the main concern here. What if your tenants quit rents? You will need certain amount of emergency fund to cater for this. Although not that simple, but it is definitely a workable way to millionaire. It may seems a little bit slow, but its a surer way. Set the target, plan accordingly, action and work hard, then you will achieve it one day.