What successful property investing professionals know.

Investing with a professionally planned property investing strategy is second to none in creating wealth for investors.

However, the quote 'as safe as houses', for some, will generate the image of putting your money into a low interest bearing savings account.

When in fact, nothing would be further from the truth as property, enables the investor to leverage their investment well beyond any other category available in the market place.

This is because lenders will allow you to borrow up to 95% of the value of a residential property asset. No other asset class is given the same courtesy by lenders. Not even commercial property where most commercial lenders in today's market will only allow borrowings of up to 70% of the asset value.

It's Time In - Not Timing
Property isn't necessarily for everyone as it should be viewed as an investment that will provide results over the medium to long term and not something that will create wealth overnight.

When buying properties keep in mind it's the length of time over which you hold your investment, not the economic cycles, which come and go, that will determine your long term wealth.

A Focus for Investing
Property investing provides a valuable focus for saving, particularly in a world which encourages frittering away income. Some advisors are apt to call investing in property 'non-liquid' - meaning that selling is not a cheap and quick process compared to shares.

Paradoxically many respected financial advisors suggest this very fact is an advantage. Because, it provides a built-in check for investors against making a too hasty decision to sell an asset.

What about the Down Side Risk?
Frequently, a daunting aspect when investing for the first time is the thought of racking up all of that debt and what'll happen if something goes wrong.

And yes, things can go wrong, and if you haven't done it before you're probably well advised to take your time and do the necessary homework. Besides deciding on a property you've found as the best investment you can find, it's critically important to analyse your affordability factor in varying economic circumstances.

What if interest rates go up? What if you don't have a tenant for a few weeks? What if you lost your Job? These are some eventualities that should be factored into your property investment strategy before you commit yourself.

'Credible' investment advice from legitimate property investment companies on how to invest in property can be invaluable when looking for the right investment strategy.

Don't rush into committing yourself just because a sales person has painted you a glossy picture. Don't be pressured into signing on the spot, Good advice is to think about your decision overnight, or even longer, before making any impulse decisions. If need be, get a second opinion from a knowledgeable person

A credible company will always have your best interests at heart, they'll be looking to develop a long term relationship with you and they'll factor in these questions when tailoring your property investment strategy.

They'll then recommend solutions for any factors shown that need to be addressed, or alternatively suggest you defer making a commitment until your circumstances are conducive to you safely and affordably making the commitment.

Can These Concerns be Resolved?
Are there solutions to those types of concerns we just mentioned? In many instances there are and for many, these issues can be resolved by developing a property investment strategy that is correctly structured for their individual financial circumstances.

As a measuring gauge for yourself, we recommend once you've analysed your strategy when buying an investment property and you've re-assured yourself the correct fundamentals are in place. You should then check your emotions. Do you feel safe? Do you feel it's secure? Do you feel it's affordable for your circumstances?

If you can't answer yes to all of the above questions, then maybe you should wait until you can.

Psychologically Satisfying
Many people, perhaps most, find property investing, satisfying.

However, one of the first fundamentals is to ask yourself whether you have the right mindset for it. It's a bit like gambling, isn't it? Albeit in most instances, it's a lower risk form than gambling.

Often, would be investors are undecided as to what investment strategy they should develop for themselves……Should it be, property or shares?……these being the main selections people prefer. But, there are numerous other options out there in the way of cash savings, currency trading, art, coins, stamps and so on.

Most of us realise we all have a responsibility to plan and do what's necessary if we desire to create financial independence for ourselves.

It's interesting to note the cornerstone of the investment portfolios for the majority of Australia's 200 richest people is residential property. Now, this isn't to say this is where they originally made their money, but this is where many choose to channel their cash flow once received.

Safe, Secure and Affordable
This is because once in place, property provides a safe secure foundation and allows some of them by choice to diversify into other higher risk/higher return areas. And per chance they happen to get their fingers burnt (after all, they're only human too) then, they have solid bricks-and-mortar assets to fall back onto to support themselves. Or, even borrow more money, so they can have another go.

You see, they know if they lose their shirt/blouse in a high risk investment gamble and they still have residential real estate assets to borrow against, then the lenders will still lend to them.

Most financial experts (and we're talking about the one's that do it, and not the ones that sit on the sidelines and theorise) favour well located and soundly structured investment in property as the best vehicle that every working person can use as their foundation to start achieving their financial independence.

Should debt be a concern?
Financial experts classify debt into three categories bad, neutral and good. Bad debt is when you borrow to buy consumer goods that quickly depreciate in value after you purchase them.

Neutral debt is usually associated with your home mortgage. Its classified neutral, because it has to be paid off with your after tax dollars, but in most cases that is balanced out with capital growth over the time you hold the property.

Good debt describes borrowing money to put into any type of investment that can give you a positive return over and above the debt you have incurred. This type of borrowing is popular because of the leveraged returns that can be obtained through both tax benefits and income returns.

Leverage Provides Maximum Returns
In other words you can put in a minimal amount of your own funds but you can borrow many times the amount you have contributed and therefore you're leveraging the total value of the investment against the amount of your own funds that you put in.

Happy days……, as long as your investment doesn't go wobbly on you! As many who borrowed with margin call loans to buy shares will attest to in the recent stock market debacle……Ouch!

Property investing or the negative gearing (to be constructed, coming soon) of property has been for many, a less nerve wracking experience than other types of investments when it comes to their future wealth creation plans. Because, designing a safe, secure and affordable property investment strategy that's deliberately based on sound investment solutions, then it will serve you well into the future.

You will be able to calculate how affordable property investing will be for you personally when our investment property calculator is available on this site, won't be too long.

Mistakes are Often Made
You see, property isn't perfect either. There are many mistakes would be investors can make. By avoiding common mistakes, you may not make property investing fool proof. However, if you're prepared to take the time to accumulate some fundamental wisdom on how to invest you will certainly minimise what financial experts call the down side risk.

There are a number of advantages of property over other types of investment. First, you only need 5-10% of the property's value in addition to the purchase costs (which are made up of purchase stamp duty, conveyancing costs and loan costs) when buying properties. More information will be available on this subject soon when our investment property financing page is completed soon.

No Money Down
And if you have sufficient equity in other residential property, such as your own home, then the banks will usually allow it to be used as security, thus enabling the existing property to be cross collaterised with the new investment property. This allows many to invest in property without taking any money out of their immediate pocket.

In contrast, other investments will normally require a fair chunk of change to allow you to get started. However, many of those other investments will allow you to also leverage with equity in existing residential property. But again you'll find they will want a greater percentage of that equity as security than they would when compared to buying an investment property.

Removing the Risk From the Family Home
An additional advantage of borrowing when investing in property is the lender will allow the separation of the investment property from the initial security that was cross collaterised initially, after as little as 5% of the value of the investment property has been paid off. So, for those concerned about using the family home as the initial security to get their property investment strategy underway, this can be the difference between getting started to secure your financial future, or doing nothing.

Because it's Time In - Not Timing
Consider your investment strategy carefully and if it's safe, secure and affordable and you're able to tick all of the other boxes, then the other important consideration is we're not getting any younger, So, as time passes us by, so does opportunity.

www.Discover-Financial-Freedom.com
c/o Equity Resource Pty Ltd, PO Box 8056, Baulkham Hills NSW 2153
phone 02 8861 1688

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Equity Resource Financial Planning is an Authorised Representative of PATRON Financial Advice AFSL No 307379. Equity Resource Pty Ltd is an Authorised Credit Representative of Vision Financial Services.

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