Unsexy, dull, overlooked… This play is the lowest risk I know. Of course, no international real estate investment is risk-free. But this is close.
It’s also the easiest way I know to increase your investment 629% in seven years.
This strategy is dull — like owning a toll road or an oil pipe. You won’t have the cocktail conversation of an internet startup investor. But my bet is you will have a lot more money. Because for every $100,000 you invest, you could return $628,620 over seven years (before taxes and other costs). And you’ll sleep at night.
You will need cash for this play. There’s no developer or bank finance. You’ll need to put time into it. And it requires a tolerance for boring investing. But if you have all of those things, you could see serious gains…
The Secret Sauce of the Most Profitable Investment
The strategy: We buy middle-class condos cheap thanks to a special situation in a place where economics and demographics are moving in our favor. And we buy the type of units with maximum yield. The biggest rents for every dollar invested.
I call this strategy “The Accumulator.” Done right, it’s like having your own real estate ATM.
This isn’t some closely guarded secret. The savvy and connected have made billions following this strategy as every major city in the world emerged… from London to Melbourne… Tokyo to Berlin.
Members of my inner circle have seen great profits from doing likewise, too — in places like Ireland and Medellín, Colombia. That’s the beauty of our international focus: We have a world of choice.
There are four steps to “The Accumulator” investment strategy. Combined, they add up to an exceptionally profitable moneymaking vehicle.
Step 1: Pick Your Asset
Buy property that generates an income of 1% per month. The best way to find a property that generates such a high monthly return is if you buy it cheap thanks to a special situation. In Ireland, it was the economic crisis… In Medellín, Colombia, it was because of the city’s outdated reputation… But it doesn’t need to be a crisis market.
That’s the first part of the strategy. Buy your asset and start collecting rent every month. If you’ve chosen your asset right, that 1% rental income isn’t static. To earn more on your asset, move on to step two…
Step 2: See Your Income Grow
Choose a rental property type in an area where the income stream is rising fast thanks to growing demand. A property I bought in northeast Brazil is rising by 1% per month. Which means after 12 months, it’s gone up 12.7%.
This is compounding. Suppose you buy a rental property for $100,000. The current rental income stream is 1% a month. But it’s also growing at 1% a month. In month one, that’s a return of $1,000. Month two, that’s $1,010 ($1,000 plus 1%). Month three, that’s $1,020.10 ($1,010 plus 1%), and so on.
And of course, in the right market — or if you choose the right property — that 1% per month can even increase.
Step 3: Watch Value Rise
The value of the asset is directly tied to the income. Every time the income goes up 1%, its value goes up 1% too. Over time, that means the value of your asset is rising steadily on top of the income. This compounding happens in exactly the same way as that of the rental income.
Since our 2011 buying moment in Ireland, values of opportunities like this have close on trebled — and rents have more than doubled — in less than four years. (Based on multi-unit apartments bought at fire sales back then.)
Thanks to today’s buying moment in Brazil we can find opportunities at a yield of 1% per month. And we can buy cheap thanks to Brazil’s psychological crisis. Over time, I expect yields to drift toward a more normal level of 0.7% per month.
Step 4: Reinvest Your Income
Take the rental income and do the same thing again — lock down a similar asset that will generate a healthy income every month. Rinse and repeat and you’re on the fast track to major profits.
It’s the type of money machine that, once it starts scaling and compounding, can become unstoppable — unless you get bored and change course. That’s why being comfortable with grunt admin work and not a lot happening is key to making this investment work for you.
If you are, this is probably the easiest, safest way to increase your investment 629% in seven years that I know of. I’ll take a return like that any day.
Wishing you good real estate investing,