The REAL Benefits of Property Investing
You must have been living under a rock if you’ve never heard about the “impending doom of the property market.”
But realistically, when you look at the bigger picture you’ll notice that investing in property is a lot less volatile and a whole lot more reliable (and also less time consuming) than first thought.
Owning shares for instance — not only can they be sold of in a matter of seconds (which can cause a share price to drop) but also unless you have your ear to the ground and you keep up with current events, you can lose out very quickly.
Whereas with property, it takes a little time to sell, and the key point being that property is always in demand within Australia.
We actually can’t keep up with the population growth, therefore can’t keep up with demand.
You can LEVERAGE Property
When you can leverage an investment, it means you can buy MORE with LESS. It means that when it comes to growth you can get more.
You have $50,000.
You place that on the share market and you experienced a 10% growth.
You make $5,000.
Take your $50,000, along with money from the bank.
You would be able to buy property worth $250,000.
Experience 10% growth.
You now have made $25,000.
Leverage helps you maximise your return on an investment when you experience growth.
It can generate INCOME $$
The greatest thing about property investment is that once the house is built, you rent it out.
Think about it, if you can get someone to pay more in rent then what your expenses are, that literally means that someone else is paying off your house for you.
If you have money left over after those expenses (it’s called positive cash flow/positive gearing) you can do what you want!
So realistically, if you had enough money left over, after expenses, you could fully fund your life style with a passive income. You could leave the “time for money” realm and spend your time doing whatever you want.
T A X is not a dirty word.
Sure there are some clever ways to get around paying too much, but always be prepared to pay it.
Property and tax go together hand in hand.
There are so many benefits you can claim. I’m sure you’ve heard about negative gearing (this means you are losing money on a property) but what you may not know is that if you experience this you can actually use that to offset against your income tax from other sources (like your day job.)
Tax depreciation is also often a forgotten option — this is where you claim the depreciating value of the fixtures and fittings of your investment property, and, in some cases can significantly amplify your tax savings.
LONG TERM Investment
How many emails have you received, or stories have you heard about people making millions of dollars in a little amount of time after reading a book? Or completing a course? Or going to a seminar?
The stories themselves have two things in common; they’re too good to be true and they’re trying to sell you something! Something that will apparently get you from point A (poor) to point B (rich) in the quickest way.
Do you really think though that if their approaches worked they would be trying to sell them to others?
Not long ago I received an email with a “success story”. My favourite part of the whole email was the fine print. The fine print actually said that the story was in fact fictional and was being used to highlight the likely outcomes. Yeah Right.
So lets get it straight.
Property investment is not a way to make a “quick buck”.
Property investing is a long-term game.
L O N G… T E R M
What you stand to gain over the long term well outweighs any possible gains you could experience in the short term. If we again think about our growing population, and therefore growing demand for property, the increased value of land from capital growth and inflation, and that then teamed up with your tenant paying off your mortgage (or just interest on your loan), it means that over time your cash flow will always improve.
Another thing that property investment allows you to do once you’ve got your positive cash flow is invest in MORE property. If you have a larger plan in place, wouldn’t it be more beneficial to take money you make and put it into other investment projects? Why only settle for an extra $100 a week?
There will be RISKS
Like with anything that sounds too good to be true, there’s always scepticism, and that’s completely fair. I would be a complete and utter liar if I told you that this was a risk free way to make money.
There’s always risk.
But like most of the risk in life, we can overcome or manage it.
With trusty Google (that provides commoditised information) and bright minds buzzing with knowledge (just like mine!) the risks can be overcome.
Always be willing to work hard and learn fast, the more you know the more money you will be able to make and the easier it will become to mange risks.
This risk is associated with not having tenants for a period of time. That means that you will have to cover all of the expenses associated with that property for the time it’s empty.
So what do you do? REASEARCH.
With little research, (from reliable sources) you can ensure that the location of you investment property you are buying has a low vacancy rate.
Another smart move would be calculating the vacancy rate into the process to ensure you can truly afford it, if in fact your property remains vacant for a short period.
So yeah, there are risks.
There are also risks with walking. With driving your car. With working. With living your life.
But like all of these things if you do your research along the way, if you ask questions, you learn things and when you inevitably you get it right, the upside is incredible.
You always have the power to manage your risks.
So what is holding you back from starting your property investing adventure?
If you made it through this, kudos!
This project of mine has been a long time in the making, and I hope that the more you read and the more knowledge I that I can share with you, the better equipped you will be to possibly embark on your own Property Investment journey.
Got a question you want answered?
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