In parts one and two of this multi-part blog series, we’ve gone over a number of important variables for those looking to become an accredited investor. This is a term for those with higher net worth, which often allows for certain unique investment opportunities, and it’s a status many investors work hard to achieve.
At Fox Financial, our real estate investing services, from passive real estate to IRA investing and several other solutions, often involve those who have become accredited investors or who are looking to do so. In today’s final entry into our series on this realm, we’ll continue where we left off in part two with several strategies you can take to improve your chances of reaching accredited investor status.
Leveraged Real Estate
When we talk about leveraged real estate, we’re referring to forms of passive income like rental properties, which we’re happy to offer solutions for to all our clients. An added benefit of these kinds of properties: They tend to appreciate in value over time.
This allows you to build income in two separate ways simultaneously. Not only are you generating income from your tenants, you are also holding an asset that’s appreciating, which builds your equity. Over time, you can even add other rental properties to accumulate income even faster.
Another property-related way to build up income and move toward accredited investor status involves forcing equity. This typically refers to renovating older properties, but it can also refer to building up further equity in existing properties by adding value to them – and raising the rent accordingly. Both the higher equity and higher rent income will speed up your move to accredited investor status.
Improved Savings Rates
Savings rate refers simply to the gap between what you earn and what you spend, and your goal within investment should always be to improve this rate. There are many ways investors look to do this, from tightening their belt on personal spending to investigating new investment avenues they hadn’t considered – particularly passive avenues that allow them to build income with very little activity on their part.
Finally, the house hacking process is a varied one that generally involves taking out a normal mortgage for an owner-occupied home – these come with lower interest rates and down payments than rental properties. You will have to live in the property for at least a year, but after this point, you can rent the unit out or even just rent part of it. This is a great way to not only build income, but also to eliminate your current housing payment so you’re directing spare funds toward your investment portfolio.
For more on how to build your investment portfolio in pursuit of accredited investor status, or to learn about any of our real estate investing services, speak to the staff at Fox Financial today.