question about getting started

Hi Shaun,
I would like to suggest reading a few books from Aussie authors, There are a large amount our there however the latest I have read is Think and grow rich in property, if anything this will give you a few ideas. Personally I tend to now look at different options rather than purchase and try to pay it off, however you need to consider your own circumstances. The one thing you should do is find a good accountant who is familiar with property investments and research, research, research don’t just jump into a property just because the agent says it’s a great deal.

Hi Sean,

You may consider yourself as average, however the average person does not seek to improve their situation, spend time on educating themselves or set strategies to improve their financial position.  I see hare and tortoise investors all the time and have seen high income earners in a very poor financial position because they spend their money on keeping up with perceived status that they have no money available to direct towards real wealth creation.  They would rather own flashy cars and houses and have a high level of bad debt that traps them into the lifestyle they create.

On a small salary, with good financial management you can develop a good credit history, buy a property that has good cash-flow and as it grows in value or you save for the next deposit then ad another property. 

I started out with a property I purchased for $82K and withing a few years it was valued at $145K.  With the extra equity I was able to  use the banks money to buy another property and so it went. I buy properties where the cash flow is manageable, where the rent mostly looks after the expenses or totally looks after the expenses.  By keeping a balance of your cashflow then you can buy more properties. 

My initial goal was to have 10 properties around the $100K mark that would pay for themselves, then I would effectively have 10 people paying off $1 Mil in assets for me.  From there the properties go up in value so my asset base increased and then I have $2mil in assets and good equity to keep buying more properties.

Set your goals, know what you want to achieve, what your expectations will be and what your real reason for investing is.  Find out what your initial budget is and find properties that fit your strategy within that budget.  If you find something isn't measuring up then you need to rework your strategy so you are in a market ready position, with clarity about what you want to achieve.  This way you wont fall victim to agents that sell you something you don't want, need or can't afford. 

There will be more than one strategy that will work for you, just find one that you are comfortable to start with and then grow as your experience grows.

Happy Investing
Paul.

Hi Alex,

My very first experience in property was to build a duplex pair then moved on to another property so we had 3 in 2 years.  Unfortunately after a divorce and loosing the lot in settlement I found myself starting again.  The second time around after getting back into a financial position to buy a property with limited funds at the time (there is a really good beat the bank story here that I can't share on an open forum) I was able to purchase again.  The 10th property was purchased about 6 years later and over a multiple variety of strategies.  This of course will be different for every investor. 

The most important factor to focus on is your own cash-flow and to find a strategy which will fit in with your budget and comfort zone.  If you are not adverse to risk you can be more proactive in your investing instead of passive. 

Passive is when you buy a house and land package, or a negative geared property in a growth city and then just sit and wait for the market to increase the value.

Active is when you buy a property and manufacture growth in the property value before the market does.  There are many ways of doing this and you need to get good at identifying properties which offer these options for you.  It can certainly fast track your results. 

I hope this helps you some more.
Happy Investing
Paul.

Thanks again Paul !!!

It's really good to hear different stories to get more knowledge. I would like to combine passive and active strategies, because the "sit and wait" as the only strategy it doesn't sound exciting at all, it has its benefits though. I would like to hold properties but in between do renovations for example. Me and my partner are still young enough to do that., and to be honest with you despite I've been in Australia almost 1 year, I want to retire young !

Cheers

Alex

Passive means to buy a house and do nothing but put in tenants to help with the holding costs. You just let it sit there and go up in value over time.
Active means you do something to it. Maybe you renovate it to add value. Maybe you subdivide off the back yard and sell as a block of land or build a house on it to sell or to keep. That kind of thing.