Property investment can make you wealthy beyond your wildest dreams. It’s a great way to end wage slavery and build a future without money worries and here’s why. Control and leverage are the property investor’s friend. They allow you to investment more money than you have or could normally borrow by investing only a small sum of your own money. There are no other investment classes which offer the investor as much financial strength for such low investments.
Control?
If you want to make money through investing in an asset – the best thing for your interests is for you to have 100% control over that asset.
That way you make the investment decisions and are not at the mercy of other people’s financial needs which may not align with your own.
Control is really important and particularly to a small investor. If you can’t afford a widely diversified portfolio of assets (and few of us can when we begin investing); you must be able to direct the way that the investments, you can make, work for you.
Leverage?
Leverage is the process by which you use “financial instruments or borrowed capital” to increase the potential returns on a given investment.
That might sound complicated but it’s what a mortgage is. A mortgage is “borrowed capital” which allows you to pay a deposit on a property and then get the bank to pay for the rest of it.
This is “free money” in investor’s terms. That’s because it doesn’t belong to you – it belongs to the bank. So, the bank assumes most of the risk on buying an investment property but you reap the benefits.
As your tenants pay their rent, the rent is used to cover the holding costs of the property – insurance, property management fee, rates etc. and anything left over you can either pay it towards your own home loan and become debt free sooner, put it towards your next investment property or pay down the mortgage.
The bank doesn’t get a share in the appreciation of your investment property, it’s 100% yours when the mortgage is paid.
Typically, you will pay 10 – 20% deposit on an investment property. So, for example, if you put down $100,000 (20% deposit) then the bank will give you $400,000 in a mortgage on a property worth a total of $500,000.
Assuming 5% growth in the value of the property each year (a reasonable assumption in Australia’s market) then in 20 years – you can expect the property to be worth $ 1,326,648.85.
You get back 13 times what you put in in the first place. That’s the power of control and leverage.
If you’d have put the money in a bank account for the same time based on today’s best rate of 1.81%… you’d have $143,155 after 20 years. A return of 1.4 times your original investment. See where the “free money” comes from in investments using control and leverage?
Ready To Get Started With Control And Leverage?
Then you’ll need to find yourself an investment property and that’s where I come in. Contact me today and let’s get you some “free money” in your life.