Make no mistake, for the younger generations retirement is going to have to be funded by themselves and the sooner one starts to set up their retirement the better and easier it will be. Property investment is still one of the best ways to build your wealth.
For Baby Boomers it was “buy your own home” and enjoy life. It wasn’t until most Baby Boomers got into their 40’s that they seriously started thinking about putting money aside for retirement.
Not so today.
Today people need to start looking at investing in their 20’s and it is great to see different reports that some people in this age bracket are doing this very successfully.
So what are some property investing strategies that will help get you across the line to owning your first investment property?
- Hang on to your home and pay it off as fast as you can
- Stay away from credit cards and only buy with cash
- Start a ‘no touch’ savings account with an automatic deposit from your everyday account on pay day
- As soon as you can comfortably afford it, use your savings and your house equity to purchase your first investment property
Basically to grow a property portfolio it is a matter of the old saying “no pain, no gain”. You may have to suffer living in a smaller property for a few years until you can upgrade, but once you can get a couple of properties in your portfolio it won’t be long before you can quickly grow your investments and also have the house of your dreams. Hang on to those dreams and you will get to where you want to go.
Buy so tenants can afford the rent?
Review your ‘property criteria’, the size of the property and what tenants you would look at accommodating in the property before buying your first investment property.
Also consider the income earning capacity in the area where you are buying. For example, if you purchase a property in Sydney CBD you can probably find a tenant earning top dollars (assuming the property is worth it) as opposed to purchasing a better property in the outer suburbs of Sydney where the average wage is lower.
Likewise if you decide to purchase in Gladstone, Queensland, consideration needs to be given to the average wage paid in that area and what typical rent could be paid by the tenant.
The point I am making here is that, taking Gladstone for example, you bought one of the better properties in Gladstone with 4 bedrooms and a pool, the number of tenants that could afford that rent would be smaller than the number of tenants that could afford to pay for a 3 bedroom home, no pool
You can see how by purchasing the right priced and type of property in a particular area can affect the number of applicants you may have for a rental property and could also therefore, affect the number of vacant weeks you may have in between tenants.
Take these facts into consideration so that if you decide you have $400,000 to spend you are buying in an area that has plenty of tenants who can pay the required rental you desire.
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