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December 19, 2015 by bertram

Have you wondered how many investment properties you would need for financial freedom?

I have found that whilst most property investors hope to one day replace their personal exertion income with cash from their investment properties, most don’t have a strategy to achieve their goal. Furthermore the sad truth is that most people do not even think about doing this or for that matter even consider financial freedom; or we would not have 85% retiring on less than $35,000.

Here is a brilliant example of this:

I was speaking with a friend of mine the other day and it was suggested that I should speak with the son about investing in property, as he was earning very good money, but blowing most of it on an expensive lifestyle and not saving. This of course is not unusual for many young people and I said that I would be very glad to chat with him.

My next question was; “So what property have you invested in?”
Answer; “None.”

Here is someone with a good income, living in a house worth about $950,000. So I my next question was; “What is your mortgage?”
Answer; “$50,000.”

So let’s look at this as a case in point. My friend has equity of about $900,000 in their home, which they could easily utilise to grow their wealth and yet they have no investments towards creating wealth or a nice nest egg to retire on!

There would be a number of reasons for this, most of which I have touched on ad nauseam. However, the main reason is ‘lack of education’ in creating wealth through property. This is a subject close to my heart and I promise that I will be offering to educate you on this subject next year.

So, I asked a mortgage broker (http://ozloanmates.instapage.com) that I know about this case, to explore the possibilities and it would appear that my friend (let’s call the friend John) could easily borrow around $550,000 and much more; if the rental was factored into the mix.

So John could go out and purchase a residential property (for say $550,000) that would have a rental return of 4%, which translates to $22,000 pa or $1833 pm before costs or say $19,500 after costs or $1625 pm after costs. The repayments will be $1833 on an interest only loan. The difference is $208 per month or $48 per week.

Note that I have not factored in tax deductions for depreciation, building allowances etc. etc. which would make it a positively geared property or let’s say neutrally geared property, that is increasing in it’s value by 10% per year on average. That being the case in 10 years the property is worth around $1,000,000 and will be returning $40,000 pa.

The possibilities are endless, because John could even buy 2 or 3 properties given the $900,000 equity in the home. I could go on and on, but the simple question is how many people are sitting on good equity in their home and not using it to increase their wealth. All it takes is a phone call or an email to open the doors to new possibilities.

So do yourself a favour and at least start thinking about it. They do not teach you this stuff at school and be mindful of property spruikers flogging their properties and I promise that I will be doing more to educate you on the endless possibilities of wealth creation through property.

For any questions, email: bertram@itsabreeze.com.au

Filed Under: Property, Wealth, Wealth Creation

HOW TO SUCCEED IN PROPERTY INVESTMENT

November 5, 2015 by bertram

As I have mentioned before, I do not believe in get rich quick schemes and I do not have magical investment formulas. My investment principles are based on over forty years of experience and successful implementation, which I use for myself and for my clients.

Start with the end in mind

I have said it many times and I will say it again, you must know where you want to be and when. Everyone wants a great rate of return, but how should your investment strategy be designed? It should ensure that it assists you to: either provide an income and/or grow your capital to ensure that you increase your chances of achieving your financial goals. Start with the end in mind and know what you are trying to achieve and establish your timeframe. For example, don’t invest in shares for a quick gain if you will need the money in 12 months. The intended quick gain could actually be a quick loss. If you can stay invested for 5-6 years then the risk of short-term volatility diminishes with the longer time frames.

Invest not Speculate

The tried tested and true ways that have worked many times before are hard to dismiss. Investment is for the long-term. That said, at times you have to think outside of the box. But then, you must do plenty of homework before you jump into anything in order to minimise your risk. Almost everyone was happy to be an aggressive investor prior to the GFC, but realised their attitude to risk was different when markets fell. Ensure your investment choices reflect your tolerance to volatility and risk. Invest in things you know will be there tomorrow. Sensible and controlled investing is not gambling, but speculative investment is. Stick with quality and be patient – you will be rewarded in time.

Resist the temptation to follow the herd

Many people base their investment decisions on their emotions at the time. Being fearful (in falling markets) or greedy (in rising markets). Following the herd or making snap decisions based on emotion is a recipe for disaster. Warren Buffet (renowned US investor) commented during the GFC that he believes investors should “be fearful when others are greedy, and greedy when others are fearful”. Set your own goals, run your own race and try to screen out the background noise. Make rational and factual based decisions where possible – a great adviser will assist with smart decision making in times of market volatility and uncertainty.

Never over commit with debt

Although borrowing to invest is a good way to increase your wealth over time, ensure it does not place unnecessary pressure on the family finances and require that you compromise your lifestyle to a point where you cannot afford to enjoy yourself. Placing unnecessary financial stress on yourself is not recommended!

Never over commit with investments

Ensure you have an emergency cash supply. Ensure a portion of your investments are liquid and can be sold quickly if the need arises (term deposits are handy for this). But importantly make sure you never have to sell if markets are low and the timing not right.

Do not hesitate

Begin your investment strategy as early as you can, as it allows you to build the foundations of future financial success. Even when markets are high, if you are ready; just do it. Do not wait for the market to rise or to fall. Take the step when you need to, because this is a long-term strategy. If you are disciplined and patient, you will reap the rewards.

Do not be a loner

People that are financially sound and successful get advice. This is because if you have the right adviser who is not just selling you a product but has your best interest at heart he/she will give you right advice about your financial strategy and structures and your chances of achieving financial security increases dramatically.

How I can assist?

I am happy to offer you a complimentary consultation to discuss your options for wealth creation. All you need to do is email me at bertram@itsabreeze.com.au with the heading ‘Complimentary Consultation’ and I will send you a questionnaire, which will help you and help me formulate the right strategy for you.

 

Here is a short article titled: ‘A beginners guide to negative gearing’

Just click HERE to read

And if you want to be kept up-to-date with what is happening in the property and investment market, like my Facebook page; ‘Property Advocacy Melbourne’ and you will have access to all the current news and information as it happens.

To like us on Facebook, click HERE

Till next time.

Warm regards 

Bertram

Filed Under: Personal Development

Setting up your team when it comes to property investment is very important

September 2, 2015 by bertram

So you have made a decision to create wealth through property, you have educated yourself about what to buy and where, you have created a strategy and now it is time for taking the right action.

Does this sound like you? If not this blog post might be of value to you.

Setting up your team when it comes to property investment is very important. So whom do you have on your team?

The property team should consist of an accountant/financial advisor, conveyancer/solicitor and mortgage broker and to get the right information and create the right strategy you should have a mentor/property advisor to guide you.

I have covered the subject of property spruikers before with their ‘free’ seminars and ASIC has been very busy tracking down over 80 or more of them recently and pulling them into line. So please stay away from them.

So we start with the accountant/financial advisor. As you would know all accountants are not financial advisors and furthermore all financial advisors are not really financial advisors. They do a very important job, but ultimately their role is to put the right beans in the right columns. What you need to know, to determine if your accountant is the right one for you, is to find out if they are financially secure themselves and whether they understand how to create wealth and have the knowledge and the experience to do just that.

And don’t forget your depreciation schedule for your investment property. You need to be sure that your accountant has competent knowledge of this plus planning, tax returns, trusts, self-managed super funds etc.

Don’t be afraid to ask what your advisors experience is, remember they are helping you build your way to financial freedom, and their advice needs to be in line with your goals.

As far as a conveyancer/solicitor is concerned I am a bit old fashioned and would rather have a solicitor rather than a conveyancer on board, because at times you might need advice on legal structures for your purchase and if any complications arise they are ‘Johnny on the spot.’ That said, you would be looking for a solicitor that did plenty of conveyancing work.

I will touch on Mortgage Brokers and Mentors/Property Advisors next week, as they are a very valuable ally on the journey of wealth creation.

 

Here is an interesting piece regarding dodgy Property Managers and some shonky practices.

 Click here to read

It’s a Breeze has a Facebook page that has up to the minute information and interesting articles and comments on real estate, property and investment. Like us there and you can benefit from the information.

Click here to like us on Facebook

Also, please check out: our new website and give me some feedback. I will appreciate any comments.

Filed Under: Property, Wealth, Wealth Creation

Why consider anything else?

May 19, 2015 by bertram

In 1997 I sold a Californian Bungalow in Glen Waverley (rare for the area) for $220,000 and I noticed that it was passed in at auction for over $1,000,000. If you do the maths; $220k x 2 = $440k and $440k x 2 = $880k. So the property has more than doubled twice in 18 years. It proves what I have been saying for the last 40 years; property doubles every seven to ten years.

So why would you consider any other form of investment?

Furthermore; if you have $80,000 to invest and you purchase a property for $400,000 with an 80% loan and the property doubles in ten years your investment is now worth $800,000. Considering you invested $80k and the interest only loan is still $320k this means that your $80k has now become $480k. Not bad for ten years, is it?

If you put your $80k into shares and you doubled your investment you would have $160k.

The difference, as you will notice, is that you can leverage property.

Okay, so I am biased towards property and you can probably see why!

I am always happy to chat about property and I do post some interesting facts and information on our It’s a Breeze Facebook page. So, if you want to keep abreast of the market, please like us there.

Click here to like us on Facebook

Filed Under: Personal Development

Do you think investing in property is difficult?

May 19, 2015 by bertram

Many people feel they can’t invest because they think it is so difficult and complicated, so they take the path of least resistance and don’t do anything.

Others start and then give up along the way because they over complicate it and can’t see themselves getting anywhere and in some cases they don’t know where to start.

People listen to property spruikers who say that they have all the answers and that you need to do courses to do this and it all seems too difficult.

However wealthy people plan, take action, learn from their mistakes, consult experts and take charge of their own financial affairs.

Sadly, most people aren’t prepared to pay for good financial advice.

The truth is we all pay a learning fee as we move up the ladder of property or investment success. Some are prepared to pay mentors and advisors, while others end up paying the market and this tends to be a very expensive way to learn.

There is an easier way. Just email me on bertram@itsabreeze.com.au and I will help you and assist you get there in a way that suits YOU.

Filed Under: Personal Development

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