I am wanting to start building a property portfolio and not sure where or how to get started. I have sold my home and have around 200k to invest and not sure if I should go residental or commercial, what I should be looking for, how to use the purchased properties to purchase new properties etc. Have spoken to a few people but have gotten mixed and sometimes confusing advise and not sure if paying thousands of dollars to take a course and have access to someone who will basically just double check your findings is worth while. Id like to build a portfolio that will have good capital growth and will also provide me with an income and financial security for down the track.
Any help/advice would be appreciated.
CheersI think you're getting confusing advice because there are so many options for you! You're in a great position , but it's really difficult to answer your question. There's no "right way" to invest in property – people have made money in so many different ways. There is literally "a world of choices" for you.
As you're a beginner, I suggest investing in residential property is less complex than commercial. $200K will leverage a lot of real estate, depending on the state/country you invest in – $200k wont go as far in NSW as it will in SA for example.
You say you primarily want capital growth, so that generally means you want to be looking at 3-4 bed family homes, rather than units – although inner city units have done very well in some states. I like suburban units because the rent covers most or all of the mortgage, whereas the rent on a house wont even come close – but my goal is an alternative income so I can quit my crummy job! You need to think about your own goals.
There are just way too many options for you to outline in one post – you'll just have to bite the bullet and sit down with a couple of books on real estate investment, then we'll be more than happy to help with more specific questions on the strategy you've chosen.
Best wishes on your property investing adventures!
Education is the best approach. A book doesn't cost much compared with a course or making a mistake.
There are books on developing property
There are books on negative gearing
There are books on positive gearing
see
http://www.businessmall.com.au/property-investing/property-investing-generalI am even going to give you an un-heard of guarantee. If for any reason whatsoever, you are not happy with the information or that it will benefit you just ask for a refund within 30 days and I will return your $29, no questions asked. I am prepared to do this as I would not want to keep your money if you were not completely satisfied or felt in any way unhappy with your purchase.
There is a thread in the 'Heads Up' section that has book reviews. Check that out if you want to get some books on Property Investing. I have looked up that section numerous times to see what books are helpful or not.
I have found Margaret Lomas' books quite helpful with an Australian specific approach to property investing. She doesn't espouse 'out there' results and writes in an easy to understand format. Neil Jenman also has some interesting books and takes a slightly different approach to Margaret. It comes down to what you feel most comfortable with once you have some more knowledge.
Good luck
Sonya
Start by reading as much as you can. There are many useful books out there – buy just one or two, stay away from the american ones too – and then read as much as you can here and at somersoft forums. ALso learn to use excel and play around with various scenarios on the spreadsheets. I wouldn't pay for any courses.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
There are three main souces of capital for business ventures: 1) loans (tough to get even after you have revenue), 2) institutional venture capital and 3) angel investors. A business attorney can be often provide connections to investors. Also, check out angel investor groups. Getting institutional VC financing is very difficult and even more so than usual in the current economic environment. They are looking for the combination of a compelling product/technology AND the technical and managerial talent to make it a reality. It is often more about the team and your ability to build a business around either a new technology, product(s) or a powerful business model that it is a specific idea. Its important to understand that VCs primarily invest in great management teams and/or exceptional technologists. So, if you don't have the background, I strongly recommend you get it before pitching your idea. Generally, you need to have either several years of senior corporate experience in the right area for your venture or be a technical expert in the field of your products/business model. If you don't want to wait until you acquire the knowledge yourself, you need to recruit it into your team. If you've got the goods, research the vc firms to find those that invest in your product/business area. Then, network to get a referral if possible. It is much better to get a referral than mailing your plan in. VCs get hundreds of busines plans & pitches and it is very hard to standout if you mail it in. Make sure you are really prepared with a well-thought presentation and be prepared to answer questions about your market and competition. http://www.remaxstilbaai.co.za
I would always support the view to get well educated and have read heaps of books and also completed course. There seems to be a negative view on course in this thread, but they do offer something different to books; you need to choose the right one though and they can be pricey,
In terms of your questions, I would go residential in the first instance.
Purchased properties are used to buy other properties by freeing up equity through refinancing your existing properties,
"Id like to build a portfolio that will have good capital growth and will also provide me with an income" – You will need to understand the financials behind property investing and the difference between negative gearing, positive gearing and positive cashflow.
You will also need to understand how finance works and then work out your borrowing capacity as a good first step.
Another option to consider is to find someone who has successfully invested in property and get their inside view (this can be quite different to what is said in books…)
Good luck!
I highly recommend getting yourself educated via seminars. spending a few thousands will save you thousands……….I speak from experience.
Make sure you keep logging on to this forum, you will be amazed at the knowledge you pick up.
Even trolling through the inactive posts for research will surprise you.
But I would definately be starting with residential. Good Luck!Hydra
hi Guys,
Canbguy yr in a great positon for sure !! Read and research and read again .Ultimately though jumping in and doing something is the best learning ( eventually when yr ready !)
I would recommend you look at commercial property as you have good equity and plenty of cash. Look at a unit possibly ,making sure its got a good lease attached,parking and good flow past it.(pedestrian and traffic).
Dont be scared by it.It flows much better cash than RIP.Luke Taylor | Hope Property Investing
http://hopepropertyinvesting.com
Email MeProperty Support,Strategist and Buyers Agent
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