This may seem like a silly question but I am not really experienced in this area.
If someone has 45 properties, how are they making their money? Obviously they may be collecting rent but in terms of capital growth, do they sell some to buy new ones or do they just hold on to them until they need the money? And when you do need the money do you just sell and put the lump sum in the bank? How does it work?
Before you purschase you should have your exit strategy worked out so you know what you are trying to achieve.
For some people this may be a buy and hold until they retire and then sell some to pay off others so you then have the rent as income on the ones that are now paid off.
For others, they may wait for a ceertian amount of growth and then sell so that one sale may then fund two new purchases etc.
Others may buy properties that they can add value to so they then have a postive income immediately.
There’s many different scenarios, but firstly you need to work out what you what your end goals are and then work out what will work to achieve that end goal.
PK
If I can assisit to clear up things (in case of confusion).when yo uby …. you nee to know your financial position at the beginning of the process and also know your “Worst case scenario”
So if Plan “a” does not work” then go to plan “b” ….
Fo0r example if you buy in a strategy that you are going to buy on wholesale and then renovate and then sell and you know the yeild is say 11.5% … then you know if you renovate and then try to saelll…. and cannot,….. you canthen rent for a higher rate (due to renovations) and sit on a cash cow till the next deal comes along … you can then access the equity to purchae the next deal…. meanwhile seems like a silly time to stop checking out other houses in case it doesn’t pan out.
So if you are unable to ell at a higher rae … you simply rent out at a high yeild!
Cheers
Kiwi[strum]Why Rent? Rent 2 own!
http://www.rent2ownaus.comHi Lobs,
There is no one answer. However generally you are in property to make money. This would have to come either from income or capital appreciation. Everyone on this forum has their own strategy they use to either increase the income or capital appreciation. It could even be as simple as buy and hold (set and forget for as long as possible!).In the past I have been a simple buy and hold kind of guy. But now I have moved onto buy and improve a little and then hold!
But I dont own 45 properties.
Hope this helps
MatHi Lobby,
Not a silly question at all, as there are numerous ways to make money through realestate, and everyone has their own opinion of what works best for them.
In terms of capital growth, you may not need to sell in order to access your cash. You can redraw any equity you have built up, and use that to fund your lifestyle. This strategy only works well when you have a large portfolio of strong growth properties.
For a great description of this “Living Off Equity” strategy, check out Michael Yardney’s new book. He describes it as kind of a very large credit card that pays itself off through growth.Best wishes, whichever path you choose to take.
Chris
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