B Invested

Q&A: I HAVE SAVED $190K, WHAT CAN I DO THROUGH PROPERTY INVESTMENT?

A WEBINAR PARTICIPANT ASKS:

“I’m 48 years old, have around $190,000 saved up and have a home loan at the moment (around 200,000 left to pay back). I’ve been thinking about pouring my money into superannuation but am considering property investment.”

FIRST THINGS FIRST …

Before you can make a decision on the best strategy for you, you will need to discuss the finer details of your financial situation and goals for the future with somebody who has a proven track record at successful property investing. By attending a BInvested Map session, you will have the opportunity to strategise with Daniel Young. He built his portfolio of more than 70 properties in the space of just five years.
Qualified financial planners with expertise in helping property investors, such as Dynasty Private Wealth, can also help you determine the best way to invest your money in line with your situation, financial needs and appetite for risk.

INVESTING IN SUPER VERSUS INVESTING IN PROPERTY

Nathan says, he prefers to take charge of his own investing rather than leave it in the hands of superannuation. He asks, what will bring you better results? Nathan has built a portfolio of more than 200 properties in just 13 years. He earns round $500,000 a year in passive income – and that’s after expenses. When it comes to comparing super with property investment, the results speak for themselves. But this sort of success doesn’t come by fluking it. Nathan and Daniel have both put a lot of thought and know-how into their strategies which, when combined with more than a decade of networking with estate agents, has resulted in a win-win situation for both themselves and their clients.

A POTENTIAL PATH TO WEALTH

Nathan says, without having a clear picture of where you are at in life, it is impossible to offer advice on how you should invest your money. He offers a hypothetical to show how much potential there is in $190,000. He says, if you used $190,000 for three deposits, making sure you structured your financing correctly, you could purchase three properties under market value in metropolitan areas or capital cities. These properties would need to look after themselves financially by having a neutral cash flow. This would prevent your investments from eating into your lifestyle. In 12 months’ time, you may be able to access equity from your investments in order to purchase another three properties. Again, the same principles of buying under market value, in a good growth area and with a neutral cash flow, are essential. If you kept repeating this pattern over the next three to four years, you would have the potential to accumulate 12 to 15 properties. Say you got to the point where you had 20 properties in your portfolio. If they were each worth $200,000, that means you would have a portfolio worth $4 million. If they doubled in value to $400,000 each, your portfolio would be worth $8 million. Selling off half of those properties would most likely enable you to pay off the remaining 10, leaving you with an unencumbered portfolio worth $4 million. There is no way of knowing how long this process would take, however, the more properties you begin with, the more equity you can access to purchase even more. The more properties you own during a growth cycle, the higher your potential gains. The higher your potential gains, the sooner you will achieve a position of financial freedom.

BORROWING MONEY TO LEVERAGE YOUR SUCCESS

By using borrowed money, you can achieve higher gains. By over-leveraging, however, or not managing risk, you can cause financial devastation. It is important to go through the right broker, who will set up your borrowing structure in the best way for your situation and goals. To find out more, contact the guys at Zinger Finance.

 

Have you attended one of our Map sessions? Did it help you find clarity in your investing ambitions? Do you have a question for Nathan or Daniel? Please share your experiences in the comments section below.

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