Information provided by InReach Investments
There are many myths surrounding what it takes to become a successful property investor. I'll be giving you my perspective of the 12 key myths that are currently in the marketplace over the coming weeks. To learn more about me, Cameron Patterson, and the work we do at InReach Investments, visit us here
Myth 1: You can’t buy close to neutrally geared or positively geared property in Australia today.
My personal investment strategy
and that which many of my customers use is to buy close to neutral, neutral or positively geared and I can assure you, that these deals are still out there for you too. It just requires you to do your research and perform your due diligence. A potential property may require a minor renovation or you may have to be prepared to buy interstate.
Myth 2: I don’t make enough money to invest in property
Most people make enough money to invest in property and meet the lending criteria of servicing the debt on an investment property. The biggest problem I see people have is in obtaining the deposit. This often originates from poor saving habits.
People may want to ask themselves:
- Are they really living within their means?
- Could I be saving more from each pay cheque to put towards my long-term goals to own investment properties?
- Am I really committed to these goals?
Properties can be purchased for as little a $30,000 and investors can enter into the market with as little as a 5% deposit (providing all lending criteria is met).
Many people can also enter the market in partnership with family, friends or a fellow investor.
For the people that claim to not earn enough money for property investment, a more proactive approach would be on creating good spending and saving habits that align with their long terms goals.
“Being wealthy isn’t about how much money you make, it’s about how much you spend” -Unknown
Myth 3: Market cycles.
There is great debate within the market place as to whether market cycles exist or not.
In my opinion the information available on this is mixed, however critics will say the past doesn’t necessarily reflect the future.
Some sections of the market have exhibited cycles historically, but how long between cycles and the degree of growth and decline seems to be irregular.
The old cliché 'property doubles every 7-10 year' rule may also be difficult to apply to some mining towns, regional areas and holiday or coastal spots, particularly those with a low resident population ie. <10,000 people.
Cycles do however appear to be more consistent in metropolitan areas.
There are no guarantees for growth and to be honest, I would be very cautious of anyone that says they can give you one particularly in the short term.
My approach as an active property investor is to always buy properties with strong cash-flow, in areas with good fundamentals and have a balanced portfolio ie. Units/ houses, regional/metropolitan and between states.
Myth 4: Where you live is best to buy an investment property
This could potentially be true but you shouldn’t be thinking it is your only option. In fact, it is more than likely there are properties with better investment fundamentals elsewhere.
Due diligence is extremely important and all investors should compare and consider investment fundamentals such as yield, potential growth, new infrastructure, vacancy rates, stage of the property cycle, strategy etc.
You may feel a sense of security buying locally but it may not be the quickest and safest way for you to reach your goals.
An additional benefit to buying in another location is that you are also exposing yourself to a new property market and hence spreading your opportunity for potential growth over two different areas.
Keeping checking this space for more monthly myth’s from InReach Investments
, founder of InReach Investments, began his career in pharmaceuticals but found his true calling within the property market. After taking the leap of faith to purchase his first investment property, Cameron’s success has snowballed. To learn more about Cameron and his mentoring and property services, visit www.inreachinvestments.com.au
Disclaimer: information supplied by InReach Investments. While due care is taken, the viewpoints expressed by contributors and/or sponsors do not necessarily reflect the opinions of Your Investment Property.
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