5 Wealth Building Principles for Real Estate Investors

There are five wealth building principles every real estate investor should consider when identifying their goals and objectives. They boil down to this: Make sure the investment itself matches your investment plan. If you do not have a real estate investment plan, you can easily create one.

5 Wealth Building PrinciplesEvery investor has different goals and objectives and to help identify your goals let me share with you why we find real estate to be the ideal investment.

Read through this and then ask your self what you want your investment to do. We believe an incredible investment will have all five wealth building principles. It should have at least three of the five regardless of why you are investing. Anything short of three is merely a speculative purchase that is more of an income producing job than an investment.

The wealth building principles are associated in the acronym IDEAL™ These principles help you to identify Real Estate you believe is an IDEAL™ investment

Income When a property is rented out, it produces income to pay for its own investment. When more income is generated per month than monthly expenses, it produces positive cash flow.


Equity As tenants make your mortgage payments for you, a portion of those payments goes toward principle reductions. This is equity build up for you.

Appreciation Each year the value of Real Estate goes up in value. A 25-year average is a 6 percent gain per year.

Leverage When you borrow money from the bank to purchase real estate, usually 80 percent of  the 20 percent we invest is leveraged to generate returns on the full amount of the purchased property.

These five wealth building techniques can help real estate investors clarify and realize their goals, and become more successful. To find out more about what would be YOUR IDEAL investment, check out our Real Estate Investing Plan page! .