Millionaires in the making
These three families are on their way to becoming millionaires. How are they doing it -- and how can you?
What he's doing: John Eiler, who first dreamed of being a millionaire at 10 years old, hopes real estate will be the path to get him there. The insurance salesman bought his first property in Richmond in 2004 -- a $115,000 townhouse -- and since then has added two apartment buildings that contain three and four units.
He lives in one and clears a total of $800 a month on the others, after loan payments and expenses. On top of saving $12,000 a year for retirement -- his employer kicks in an additional $7,000 -- Eiler uses another $12,000 for real estate, to accelerate debt payoff and fund his next down payment. As for getting to $1 million: "I'm dreaming of a lot more than that nowadays," he says.
How you can make a million in real estate: With the days of fast flipping over, can property still help you get rich? Yes, says Robert Cain, publisher of the Rental Property Reporter, if you do the following:
1. Focus on rental income. Cain notes that the way to make money today is to buy bargains, rent them out, and hold them while their value ticks upward. While waiting to sell, save what you clear.
2. Play it safe. It costs less to buy than rent a two-bedroom home in 36 of the country's 50 largest cities, reports Trulia.com.
But before buying, ask a realtor specializing in investment properties for rents in your area and make sure that 11 months of income -- assume one is lost to vacancies and maintenance -- would cover your costs. Figure in mortgage rates one-half percentage point higher than for primary homebuyers.
NEXT: The Business Owners
