How to invest in property

A VERY small percentage of couples retire on $50,000pa or more, and this is not by accident – they invested their money!

Answers to some of the common questions about investing in property…

What makes a good investment?… one with a good return and low risk.

Investment property can provide a fast, sure and safe pathway to financial independence.

But what about investing in shares?

While the returns from both shares and property are good, there is a much greater risk of losing capital by investing in shares.  Recent times of market volatility have demonstrated such risk.

I know I want to invest, but can I do it myself?

Direct investment in property not only means greater control over your investment dollar (you can see and touch your investment, and you decide when to renovate, sell, etc.), but you do not have the expense of all the middlemen. Whilst Real Estate Property Managers are paid a percentage of the rent as an effective management fee of the property,  it is not a percentage of the actual asset value as is the case with managed funds.

When is the best time to invest?

Many financial commentators try to predict the best time to buy property but it is all too easy to sit back and do nothing and miss the boat altogether. The best time to buy a property is not when you judge the time to be right – because we don’t all have a crystal ball – but rather, just when you can afford.

A $350,000 property can cost less than a carton of cigarettes per week! *

If buying an investment property is so cheap, why isn’t everybody doing it?

…because they have other priorities. For example, $31pw for a new leather lounge; $52pw for a new kitchen; $77pw for a new boat; $170pw for a new 4WD (these are typical hire purchase/lease costs for such consumer items). These in themselves do not cost much, but can consume most available spare money.  Most people will identify with at least one of these. Yes you can have a 4WD now, but the boat may have to wait. Yes you can have the new kitchen now, but you may have to do without the ‘you-beaut’ leather lounge.

“I worry about going into debt”

There is ‘bad debt’ and ‘good debt’. The difference is that with ‘good debt’, you borrow to buy things that increase in value, such as property – rather than something that decreases in value, such as cars.

Borrowing money (or ‘gearing’) magnifies the returns on your investment, and makes investing in property extremely affordable. Also, if you are worried about interest rates rising you always have the option of locking into a fixed rate for a certain period.

When you team with IPW, your property questions are answered, as we help you make informed decisions by providing all the data you need to manage your investment, build your property portfolio, and steer you on the path to building wealth. Feel free to contact us at any point if you have any question regarding investing in property, or look out for our next investment seminar.

(*Please note, the example is based on an income of $47,000 pa and is a guide only used for illustrative purposes. The example does not take into account individual circumstances or financial situation.)