How to get Wealthy via Real Estate! (10 Steps)

In this article, I will discuss 10 steps to get started with real estate, even if you’re a total beginner.

Where or not you have any savings, doesn’t matter. You have to know the basics, and once you get these down, you’re already one step ahead of most people.

1. Get your own place

This is the first step towards real estate investing (or investing in general for that sorts), is getting your own place. No matter how old you are, getting your first apartment as quickly as possible is a priority.

BUT: don’t buy your dream property. Buy by following the tips below.

Why? Because your dream house will most likely be full of luxury and stuff you don’t need. You can buy this once you generate enough income to afford this luxury easily. But now, the first step should be to get an interesting property which you could rent out with a profit at some point.

Possibly even get a property with multiple rooms, get into co-housing or rent that room out via Airbnb. That’s what I do too these days, and the income that I get from my “guests” covers my loan, which means I can almost save my whole income and prepare for the next investment.

2. Build connections

Did you know you’ll be as wealthy as the people you surround yourself with? Reconnect with friends from school who are lawyers, real estate agents, bankers, investors, entrepreneurs…

Meet with them, have a drink, talk about your plans, ask for advice, make CONNECTIONS. For example, make a deal with a real estate agent friend to call you as soon as something interesting comes available… and maybe agree on a reward for them.

A banker friend will try to help you get the best loan, a lawyer will advise you on what to do or what to look out for.

The second apartment I got was thanks to a tip from a real estate agent friend. He called me “Hey Michiel, I have something you might be interested in, but we have to be quick.” An hour later, we were visiting the place, and indeed: it was a decent little apartment, for sale at an extremely low price. After checking documents and gathering as much info as I could about the place, I decided to place a bid that same day.

The bid was accepted, and I had just bought myself a studio, priced 15k below the market price.

3. Buy in the right location

Location is key to valuable real estate. Look out for the following:

• Houses in cities that have little room for expansion
• Accessibility, appearance, and amenities of a neighbourhood
• Plans for development (e.g if they will build a shopping mall, you know the value of that neighborhood will increase and investing there might be a good opportunity).
• Proximity to schools, universities, city centers and tourist attractions.

Location is especially important when you want to rent out via Airbnb. There has to be a “demand”, meaning there must be a reason or something interesting to do in the neighbourhood, for people to rent it out.

4. Buy the Right Properties

You want small properties. Studio’s or one-bedroom-apartments. Families are getting smaller, young people are looking for places to live by themselves, and more and more students want to live in dorms.

Smaller properties will cost you less but will in comparison make you more money.

Also, get properties which are up to date with today’s energy standards. With all the increased costs of livings and energy prices that are going through the roof, it’s important you get properties which are as energy efficient as possible. If you don’t, you risk you’ll have to spend money on renovations like a new roof, new windows, isolation, solar panels or more.

5. If you have the money: buy a multi-condo building

If you can buy a building containing a bunch of apartments, you’ll pay less in comparison to when you would buy all apartments separately.

You’ll pay less taxes, and you’ll profit more. What you could also do is buy a building and split it up into smaller units — if the city law allows that of course. Always check laws and regulations and inform yourself about what’s possible.

Also, you won't need a homeowner association (which cost tons of money):

6. ALWAYS get a loan

Let’s say you win the lottery. Or you inherit a lot of money for your family — many people would use all this money just to buy 1 property.

That’s dumb.

Split up that money, use it for several down payments for multiple properties, and get the rest in loans.

You get rich by using DEBT!

7. Get the Right Loans

This is an important one. Always make sure that your rent will cover your loan AND you should keep at least 20% of the rent, to invest it.

Meaning: Let’s say that you find a property which was previously rented out for 1000/month.

Get a loan of maximum 800/month, so you get to keep 200, which you can save up or invest in a fund. I personally invest it in ETF’s every month.

While I know a loan like this is not easy to find, it’s not impossible. This is where you should rely on your relationships with bankers.

What you could also do, is “go shopping”:

1. Go to bank A, ask for a loan proposal.
2. With this proposal, go to bank B, see if they can do better.
3. Then go to bank C, or bank A again.
4. Try to get the best conditions as possible!

Normally, banks will only tell you about (and try to sell you) the classic loans/mortgages.

However, there are a few other possible structures. I for example got a loan which allows me to only pay back the interest rates. This means I pay a very little amount every month to the bank, while my rental income is way higher. This gives me a positive cash flow, and gives me money to invest in.

In my country it’s called a bullet loan (I learned about this via a banker friend of mine), definitely worth checking out!

8. Rent out via Airbnb or to students

Being a landlord sounds awesome, but it can be very stressful too. Imagine renting out a property to people… who don’t pay.

You have to pay back the bank every month, but imagine your tenants don’t pay you. That’s a nightmare. This is also the reason that I said the above “get the right loans.”

A solution which I found, is buying properties to rent out via Airbnb or to students. Airbnb has some insurances which cover you, and you can also rent it out long term via that platform.

And why students? Because these are also short-term contracts. If they don’t pay, it’s easier to kick them out. Also, usually the parents pay. Statistically speaking there are less troubles with payments from parents than from “normal” tenants.

9. Put your (rental) money in stocks / ETF’s

The money that’s left after paying loans and costs, you should save. I put it into ETF’s because if you look at its history, it’s been growing mostly steadily over the past years.

Create that monthly automatic transfer to your ETF account, and let it go its way. Once you saved enough, sell the ETF’s and use that money as down payment for another property.

10. Repeat these steps

Those are the steps that I’m following right now. Today, we’re in december 2022. I was never rich, never had a lot of savings… and yet I managed to buy 3 apartments in 4 years' time.

And this is just the start, the next part of my plan is to buy a building with 3 apartments in it. That will be something for 2023 or 2024 for sure.

Good luck, and let’s gooo!

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