The mortgage brokers and financial planners in our Perth office have one common goal: to help you build wealth by investing in real estate. We also help with investments in other platforms such as shares. If you want a self-managed superannuation fund, we can help you with that, too. But we believe that investment property gives the “little guy” the best chance at maximising and growing investment income.
Recently, we found a CEO who agrees with us. His name is Chris Gray and he is the CEO of Empire, a real estate buyers’ agency out of Sydney. He is the host of a TV show called “Your Property Empire,” appearing on Sky News Business. Not only does Mr Gray’s company act as buyer’s agents for investors, Mr Gray himself is a property investor who started investing at age 22 and has done very well for himself.
According to Mr Gray, property constitutes “a solid basis for any wealth creation strategy.” Here are the five reasons Mr Gray recently gave to Perth Now for investing in real estate.
It is an Easy Study
Property can be complicated if you let it, but the fundamentals are simple and easily learned by most. There are no complicated formulas to learn, like many who trade shares. If you follow some simple “rules” it is difficult not to be successful. The main rule? Buy properties close to cities, transport, work, water and entertainment or leisure.
Simply following these rules can ensure that you don’t lose money. This is important because someone can buy shares today and watch them “crash” tomorrow. Property may go low, but it never totally “crashes” and the market always adjusts itself if you wait a few years.
It Leverages Your Time
Property is what is known as a “passive investment.” You do need to do your “due diligence” and learn the market before investing in property, but once you buy it you can almost “set it and forget it.” Most successful property investors hire a management firm to manage their properties. They are much better at it than amateurs and it frees up the investor’s time.
Eventually, one can make more from property than from their 9-5 job if they invest astutely. That allows them to have a lot more time to spend with their families and doing things they love.
It is a Safe Investment
Property investment is fully supported by the Government and the banking system. Banks have so much invested in property loans that they have to help it work or they can go bankrupt. The Government does the same because they don’t want to see a total collapse of the national economy. If too many people lose their homes, it could result in a collapse of the Government into anarchy. They will help keep homeowners on the “Bell Curve.”
It Leverages Your Money
Real estate is the easiest way to leverage your money safely from five to ten times. Those who earn a lot of money can still find a few loans for a 10% deposit. Even those who fall on the “wrong side” of new Australian Prudential Regulation Authority (APRA) regulations can currently put down 20% and buy an investment property if they are working with the right mortgage broker.
Most investors borrow 80% while those nearing retirement age may only borrow 40-50%. Using 80% as a benchmark, if you have $200,000, you can buy a property worth $1 million which can provide you with as much as $70,000 to $100,000 a year in equity.
There is a chance that you may have to put in extra money for maintenance, repairs or management, but it usually isn’t nearly as much as the profit you can make.
It is Stable
When you buy shares, you have to look at the prices every day. With property, there is not nearly as much instability. It doesn’t go up and down on a daily basis. It is consistent and usually moves up faster than inflation does.
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For a free consult or to learn more, call Purely Finance today: (08) 9453 8888.