One of the main problems facing the investor these days is frustration with a finance portfolio that just isn’t growing with the speed that an investor expects. There may be many reasons for this, from bad investment choices to conservative capital investment. But if you ask any successful investor what they think the most important aspect of their investment portfolio is, I’d be surprised if you found one who didn’t say property. Here’s why.
Property offers the best options for financial leverage and the more leverage you have then the faster you can grow your capital and build wealth. Even if you have borrowed a large portion of the money used to buy the house from the bank, say 90% with lender’s mortgage insurance, you still stand to make a considerable sum when the value of that house increases, because even though you only put down a payment of 10% of the price of the house, you get 100% of the growth.
If you draw the original deposit from existing equity then you are contributing no cash of your own but still reap 100% of the growth value. It’s not hard to see why this is such an attractive option for successful investors. Confused about leverage? Read our exclusive eBook and find out how you can use it to boost your borrowing power today using the equity in your own home!
Control and Stability
The property market is far less volatile than stocks, mutual funds or many other areas of investment, especially in times of economic uncertainty. An investment property also offers a much higher level of control over what you are buying, where you buy it and when you want to sell it. You also have the option of growing the value of the property through renovations or rental income.
It is worth remembering, too, that while the property market does fluctuate, you aren’t actually losing any money until you’ve sold the property, so you can wait out a market downturn, still receiving rental income, until the market picks back up again. Even through times of economic unpredictability people will always need somewhere to live and so you can be guaranteed of a rental income even when many businesses are losing money and closing down. Housing is an essential service and will always remain so.
Property Leads To Growth, Which Leads To Money
The simple fact of the matter is that real estate makes more millionaires than any other asset class. It’s so often that you see switched on investors going from owning one property, to several, to dozens – all within the space of a few years. It can be a little daunting to get started, but once you’re going it’s one of the safest areas to invest in and also features one of the best possible earning potentials.
It’s Quite Simple
Once you get your head around the paper work and documents required to purchase property, it’s surprising how simple it actually is. Once you have your budget and finances sorted out, if you follow due diligence in watching market prices and have potentially properties thoroughly inspected then there is little chance you will overpay or end up with a dud property. It’s much easier then keeping a constant watch over an unpredictable stock market, for example. For example, let’s say you are interested in property investment Melbourne; you would need about $20,000 to put down 10% of the price of an apartment in the inner city and borrow the rest from the bank. With a year or two the price of that apartment may have risen by 10%, which means that you have already made a 100% percent return on your initial investment, and now have potentially $40,000 in equity to put down 10% for another property. You can see how quickly your empire will build up.
Get in touch with us today and find out how you can increase your portfolio’s growth with property: