It would really help to decide on the reason, or reasons, why you would want to become a real estate investor. It will be because of these reasons that you will stick with your decision throughout the long years ahead.
I say the long years because this is not a get rich scheme, but a great long term investment strategy, which has withstood the test of time, Point number 1 is:
Investors will find their own personal motivation but in the main they will come out of the following five areas,
- Create Wealth. This is probably the number one reason, but the sad fact is most people don’t get rich because they don’t have a plan, and you know what they say, “If you fail to plan, you plan to fail.” Over 80% of Australians are retiring on less than $300 a week at the moment. Could you or would you like to retire on this amount? Government pensions may not even exist 20 years from now, but if they do, there’s a fair chance it would only be enough for a very meagre existence.
- Recycle Taxation. Ask yourself, did I pay too much tax last year? There is a legitimate way in which you can reduce the amount of tax you pay and at the same time use this extra income to offset the weekly shortfalls on your investments. (Tax is covered in more details under “The Financial Elements”)
- Security. Of the many hundreds of investors we have spoken with, another element of motivation which is often mentioned is the “Security Issue”. Most investors are investing for the financial security, not only theirs but that of their family and loved ones, so their children/grandchildren will be in a better position than they were. Investors have told me outright, “it may not be me who will ultimately benefit from these investments, but it will be my family”.
- Retire Younger. Being wealthy enough to be able to retire ( if you choose to ) motivates a lot of us. Imagine, not having to go to work, unless you wanted to! Think, if the family home was paid off, how much would you need each week in today’s dollars to live comfortably? $800-$1200 per week? If this is the case then you’ll need 2 or 3 freehold investment properties by the date you set for your retirement goal, ie 50, 55 or 60 years. One particular definition of wealth is this one, “The number of weeks you can survive, without physically working and still maintain your standard of living.” So if you need $600 per week and you have $30,000 saved then 50 weeks is the answer. You will be in the position to retire when your real estate investments can produce this $600 per week for you.
- Control. More and more the control factor keeps coming up. People would prefer to have hands on control of their investments rather than a faceless board of Directors somewhere dictating what happens to your funds and when and if you can liquidate them. Real estate as an investment vehicle provides you with an enormous amount of personal control; again should you choose to use it.
Ask yourself, what would financial independence mean to me? What would I do if I never had to worry about money again? Would you give up or cut down on work? Travel, pursue more pleasurable pastimes, buy that boat, play golf three times a week? It’s up to you, what would you do?
Please stay tuned for the following content,
2. Why would you choose Real Estate as an Investment vehicle?
3. The financial Elements, putting them all together.
4. Terms I need to understand.
5. Where do I get the money for the deposit and shortfall?
6. What are my finance options?
7. Can we analyse each investment before choosing to proceed?
8. What risks are there? How do we minimise these?
9. What are the five basic rules for new investors?
10. Take action.