Hi to all
Is it just me…?
the stories i read of more experienced property investors seem to have a common thread in that they buy 1,2, or 3 properties then the next 4,5,6,7,8,9,10 seem to come along really ‘fast’, is this due to the fact that they become better at the game and the rules ? or is there other reasoning behind it ??
For example, a story i read about an elderly couple that had a few IP’s they then checked thier ability to get finance and they were able to borrow $150k they did so buying property 3 then found a few short months later that due to a price rise, rents coming in etc, that they still had the ability to borrow $150k, so bought number 4, the ability to loan then ‘jumped’ up some and they again bought!
i believe in only 4-5yrs they have property to the value of $1,250k This ‘stumped’ me… thier situation got better, much better as they journied along>
Is it true… does it get easier as you build your portfolio ??
REDWING
“The man that thinks at 5o as he did when he was 20 has wasted 30 years of his life”
Hi Redwing,
i cant answer your question directly, but the more property you have the easier it is to obtain equity, though still it can depend on many factors, ask the people, how they did it. They may be happy to answer your question and tell you how they were able to obtain that many properties.
but some people are asset rich, others are cashed up, or some people have creative financial ideals, it really depends on how and what investing strategies they are using. hope this helps
cheers
s.i.sSave on a regular basis
“People forget that by saving just $3 per day and investing it sensibly over a working life, you’ll end up with around $1 million.”Hi redwing,
the first three are hugely important. You learn everything you need to know about buying, and it becomes rather than this huge time consuming all-encompassing totally scary thing (I’m buying a HOUSE!!!!) to something normal, that you feel confident about, almost everyday.
‘oh yeah, I just bought another house’.
Also your finances hopefully got in order before you started.i think it goes faster after the 4th on because of a combination of leverage, feeling more confident with managing the investment, psychology of confidence – and maths.
If you only buy high yiedling positive cashflow property you should be able to theoretically not max out on your lending. if you can get 15 percent net returns on you investments and your borrowing costs are 8, then you are leveraging off the bank and buying property which is going to add to your income and serviceability not detract from it. Especially important for the retired, the self-employed, or those who just want to work less/retire sooner than later.
If you buy negatively geared property and try and repeat the formula you won’t be able to (without selling your investment!) but you won’t be able to buy more and more – eventually you won’t have any tax to ‘save’ and you’ll just be losing money in after-tax dollars! Either way you’ll have to hang on to that full time job, or lose the properties. Slavery.
But people love it, most Aussies are still negatively gearing like mad, mostly because they don’t know any alternative, blahblah…if you pay all your surpluses from your properties back into you LOC or however you organise it, the sooner you will have the deposit for the next one. Serviceability not a problem because you are buying +ve CF etc…
mini
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