Like anything worthwhile, it takes time to learn all of the intricacies of property investing, but we promise it is worth the effort.
To keep things simple let’s begin with a few premises:
We’re going to assume that:
- You’ve already established a budget
- You’ve pared your budget down (in order to save more)
- You’re sticking to your budget
- You’ve saved up enough for a deposit
As we’re sure you realise, if you don’t have a good handle on your finances now it’s going to be much more difficult to manage them when you add investment properties to the mix.
So now that we’re all on the same page, let’s take a look at how you’re going to begin to build your wealth.
Wealth Creation Strategies
Learning anything new can be challenging, so it’s best to start with something simple.
The following strategies work well for both beginning and advanced property investors:
One of the best ways to jump into the property market is to buy at a discount because you’ll be cash flow positive…a must for beginning investors who are very often short on cash.
The key to a successful discount strategy is good negotiation skills.
At Positive Real Estate, our property mentors are experienced negotiators who can show you all of the tricks and tips you need to achieve a successful discount purchase.
We’ve shown thousands of investors how to find properties that could potentially be purchased at a discount. We can show you too. Click here to find out more.
Granny flat addition? Sure, that could improve your investment property’s value. But you don’t have to spend a fortune to add value. Sometimes it’s something as simple as a good clean-up both inside and out or perhaps some new shades, taps and other minor improvements you can do yourself.
There are a number of ways to add value to your investment property but what’s most important is that you figure out before doing improvements what it will cost and what financial return you can expect.
Whatever you choose to do, it’s smart to get expert opinion on your plans… just to see if they stack up. Our property mentors have hands-on experience from building up not only their own portfolios, but that of hundreds of our clients.
Common Mistakes to Avoid
Learning anything new takes time of course, and we often make mistakes. While we learn from mistakes, they can be costly, so why not learn from individuals who have walked the road you’re on now?
1. Emotional purchases
A very common mistake I see new property investors fall for is the emotional purchase. They see a property and fall in love with it.
While there’s nothing wrong with liking your investment property, the numbers should stack up first and foremost. No amount of glamour makes up for the financial losses you could incur from a poor investment choice.
2. Not understanding the market
A diverse number of factors impact the property markets, but the one thing that drives them all is people.
It’s people who choose to buy and sell, moving here and there, governments increase (or decrease) spending on infrastructure, people have children, businesses expand, etc.
Understand what drives the market, know the signs to watch (e.g. increasing population) and you’ll have a good idea where you can find potential opportunities.
At Positive Real Estate we’ve shown clients proven techniques designed to help safely push their property’s growth just a bit more helping them reach their goals sooner than they might have believed.
3. Failing to structure properly
Get your investment portfolio off on the right foot. Do you know what entity you’ll take title in? Do you know the pros and cons surrounding your choice?
Following are essentially four ways to take ownership:
- In your own name
- In a company name
- In a trust
- In a superfund
To learn more about the different types of ownership and financial structures come along to our next Property Investor Night.
These FREE events are held monthly all across the country. Learn from experienced property investors with multi-million dollar portfolios who love to share insider tips and strategies to help investors reach their goals as quickly and safely as possible.
4. Cash flow problems
While cash flow problems aren’t limited to only new investors, it is a common issue which can be avoided if the investor has a good plan set up from the start.
For example, savvy investors know the importance of having a good sized buffer attached to each of their properties.
The buffer should at least be 3% to 5% of the property’s purchase price…or even more depending upon your situation.
This is where a good financial advisor can really help you put your best foot forward. Our own financial guru Naomi Beaumont has mentoring countless of our clients, helping them achieve fantastic results…painlessly.
As much fun as it would be to become an overnight millionaire, the reality is property investor is a long term game. You’ve got to position yourself at the right time in the market to achieve the most gain possible.
To learn more about getting started in property come along to our next FREE Property Investor Night. Come and learn what many other successful investors have learned – there’s no obligation whatsoever, simply register your details below and we’ll be in touch.
Seats fill up fast, so book your seat now!
The post Beginning Investors: How To Start Building Your Wealth appeared first on Positive Real Estate.