Rich people know something very important about property rental. They know that if they own a house or flat and rent it out to someone, they will receive income every month without having to work for it.
So, how do rich people use property to get rich? They become landlords to hard-working people who use a big portion of their wages or salaries every month to pay rent.
And that is not all. The rich person also knows that they do not have to pay the total cost of the property – they only need to qualify for a loan. With a cash deposit, they can get a bank to cover the full price of the home.
Who pays this home loan? The people who rent from the rich landlord. Over time, tenants pay off entire properties for landlords.
The people who rent, meanwhile, have very little cash left over after they have paid their landlords. It is very difficult for tenants to buy things or save for a brighter future. They can’t find a way to improve their financial position.
Rent is not a bill you can ignore. If you don’t pay property rental, you can be removed from your home – and that is not a situation anyone wants to be in.
Plus, if you don’t keep up your rental payments, you will battle to find another home if you decide to move later. Landlords share information about poor payers.
Tenants often feel stuck in a financial situation, a lot like a mouse caught in a trap. Rent is usually a family’s biggest monthly expense, so this is the bill that feels like it is the main burden. This is why this money problem is called the “rental trap”.
Many people are struggling in a rental trap. There are lots of reasons they can’t break free and improve their personal finances.
Some people grow up in families that are used to living in rental housing. They do not even realise that they are stuck in the property rental trap while their landlords are building wealth.
Other people believe it is better to rent than buy a home because the landlord must take responsibility for maintenance, rates and other bills. And, for some tenants, home ownership is not an option because they don’t earn a steady income or they have debt problems that show up on credit records.
But, many people don’t free themselves from the rental trap because they don’t think it is possible. They don’t know the steps you can take to move from being a tenant to a home owner who creates wealth for themselves .
They don’t realise that property ownership is not only for rich people. Or that, with planning and commitment, owning a home is within reach of salary earners.