Real estate investing has created 90% of the world’s millionaires. The other 10% have been created through starting and owning your own business. This led entrepreneur KJ VanDerwerken in his decision to combine the two when he opened his real estate investing firm VanDerwerken Properties in 2013. Since then, he has built his company and a real estate portfolio worth well over a million dollars.
There are several aspects of real estate investing that had interested and prompted KJ to start his firm. In talking with the entrepreneur, I was able to pick his brain and dive into the many reasons behind his success.
The first is through home appreciation. Purchasing a property in the right area at the right time can create great wealth with time alone. Several studies have shown double digit home price growth year over year in 2021. Over the past five years, VanDerwerken properties have seen their current portfolio grow by 80%. This was caused by the low supply of homes, in combination with high demand in cities such as Charlotte, NC where VanDerwerken Properties operates. Historically homes have continued to appreciate which creates massive opportunity for those who simply choose to buy real estate.
The second is equity built through rental income. If you choose to rent, you are awarded short term flexibility. However, that is a massive tradeoff when at the end of the year you get back none of the money in which you paid to live there. As the homeowner or investor, when you sell your property – you get back the money that has been paid towards the mortgage. By investing in a cash flow positive rental property, your tenant is paying off your mortgage every month. Over time that’s building your equity in the property while using someone else’s money.
Next is cash flow. After paying the mortgage, any rental income leftover is yours to keep. This cash flow can be saved and used to address property issues. As owner you’re responsible for the upkeep of the properties. Unfortunately, things will happen and items such as carpet and paint will need to be replaced or updated. Having the cash flow can help. It’s also great to save and leverage for other investments. The more cash you have, the more opportunities you have to purchase. The more properties you have bringing in cash flow, can create a nice stream of passive income if managed correctly.
Lastly, the tax benefits of real estate investing can be very beneficial. Expenses such as property taxes, mortgage interest, and costs to maintain and repair your properties can be deducted. Depreciation costs over time can be considered.
As the Owner of VanDerwerken Properties, Entrepreneur KJ VanDerwerken has been able to turn himself into the statistic above and achieve millionaire status through his real estate investing business. He has plans to continue to grow his company and real estate portfolio. Follow him as he continues his journey at https://www.instagram.com/kjvanderwerken/