Purchasing Property For Securing Your Financial Future
If you have never owned investment property before or in fact focused on building your financial wealth through any means, it can be a little difficult to envisage a future where you really are worth several million dollars.
Why this point has come up is because many investors feel proud, and rightly so, to own one or two investment properties.
Where the problem lies though, as far as the future financial situation is concerned, is the fact that to secure an ‘income’ in retirement an investor really needs to be looking at purchasing substantially more than one or two properties. Two properties with 25 year mortgages are going to cost a lot of money along the way. This is a very slow way to build equity in the property market.
If a person is really looking to be financially secure 25-35 years from now there are many aspects to be taken into consideration. They are:
· Inflation
· Slow property markets
· Fast property markets
· Low interest rates
· High interest rates
· And generally speaking, all things that affect the property market each and every day
You hear of people building great wealth through property, but if you really research their background you will find that they have not always bought and held property for the duration.
There are times to buy and hold and times to buy and sell.
To become a really wealthy property investor buying and selling can be a very profitable way to build your equity. How long you hold the property for is another question – it could be 6 months or it may be 5 years or even 10 years.
Possible scenarios to take into consideration for the long term are:
· Invest in property and hold, but re-invest as the equity builds
· Invest in property to the point where the income replaces your ‘work’ income and you can become a full-time property investor
· Invest in property and focus on short term rentals with higher returns
· Invest in property and renovate and keep and rent
· Invest in property and renovate and sell
· Have a bit of each!
The point is that if you are going to really put some serious research into investing in the property market it would seem to be a waste to stop at one or two properties when you could keep on buying more as equity accumulates.
Ple-e-e-ase don’t think for one minute that I am trying to push you ahead into property investing, all I am trying to do is make you realise that perhaps only one or two properties are not going to be your answer in 20 – 30 years time when you are looking at retiring.
Filed Under: Investment Strategies
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