For example, if you owned four investment properties with an average value of $450,000, and they achieve a capital growth of 7 per cent, your wealth would increase by $126,000 in that year.
Utilising the power of leverage is how you came to own four investment properties in the first place and how you can come to own more.
And it’s easier than you may think.
Generally speaking, when starting out on your investment journey, you want to select the right type of property – one that doesn’t cost you anything to hold and increases in value over time.
From here, you will have the equity you need to increase the amount you can borrow - to enable you to purchase another investment property.
And it goes on. Each time you control a new property, you have the leverage to acquire another one – if you choose the right properties.
With interest rates at an all time low, the opportunity to succeed has never been greater. But the risks of buying the wrong property have also increased.
Affordability should not be the only measure of wise investment. Every property you buy must have a purpose and you need to identify this before searching for a property.
Selecting the right property is as individual as you are. You need to take into consideration all your financial and personal goals.
An underperforming property can cripple your future investment opportunities. You don’t want to find yourself sidelined and frustrated, unable to increase your wealth due to a bad investment.
The secret here is to use a foolproof formula – the triple ‘P’ formula that goes like this:
Plan before you purchase, invest with a purpose and seek professional advice for peace of mind.
By applying this formula to every investment opportunity, and using the principles of control and leverage, you will be able to acquire four or even more properties.
If you’d like some professional advice about an investment property, or want to get started investing, get in touch.
Paul Wilson is an Independent Property Investing Expert and the founder of We Find Houses, Educating Property Investors & We Find Finance. Paul has been educating and coaching investors since 2001. Paul provides valuable, independent guidance and support by teaching strategies on how you can invest successfully while protecting yourself from commission hungry sales agents and property spruikers. Protect yourself with knowledge, contact Paul today for a complimentary consultation on 1800 600 890 or email email@example.com
Read more expert advice articles by PaulDisclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.
- This article originally appeared on www.wefindhouses.com.au.