Did you know that most millionaires and billionaires have significant real estate investments? These individuals have learned how to make their money work for them while you may still be working for your money. However, you can follow in their footsteps. These are a few real estate investment tips to help you get started.

Create a Plan

Before you invest in any property, you need to sit down and build a plan. This plan should include your short- and long-term goals and how you hope to achieve them. Include your initial budget and the types of properties you intend to purchase. Write down as much information about the properties as you can think of, including cost, style, expected rental income, market characteristics, etc.

Discuss everything about your investment strategy, including your current and future expected incomes, asset valuations, net worth, and the number of properties you own. Don’t forget to include an exit strategy.

Learn About the Tax Benefits

No one enjoys paying taxes, and if you are like most people, you probably search for ways to reduce your tax burden. Real estate investment may be one way you may not have considered. You see, depreciation, maintenance, mortgage interest, and property taxes are all tax-deductible expenses. Every penny you spend, including property management and legal and accounting fees, can be taken off your taxes.

You can work with a qualified, experienced tax accountant or attorney to identify several ways property investments can reduce your taxes.

Learn To Leverage Effectively

Every asset has an inherent value, and your real estate should have significant value. At the start, you may not have much leverage you can use, especially if you mortgage your properties and don’t invest additional money in them to increase their value. However, your equity will increase over time as your properties accrue value and you pay down your loans. This equity can then be used to finance future acquisitions. In this way, you use other people’s money to increase your net worth.

However, avoid fully leveraging all your assets. One downturn in the market and one too many vacancies can place you in a precarious financial position, so pay some of your properties off and leave them that way. Also, once you achieve your property acquisition goals, increase your mortgage payments to accelerate your asset payoff period.

As you begin your investment planning, consider these real estate investment tips.