Achieving financial freedom through property investing is within most people’s reach, including yours.
But the earlier you start investing, the greater your chances of building a property portfolio that will generate an income that’s capable of letting you live the life you want.
The good news is that it has rarely been easier to take the first step on your property investment journey than in today’s property market. That’s because reduced prices and record low-interest rates make entering the Sydney property market a more affordable proposition than it has been for some time.
After you’ve taken your first step and, over time, both the value of your property (capital) and your rental income (yield) should grow. As your property grows in value, the equity in your investment property will grow too. You can then leverage this equity to invest in a new property and grow your portfolio.
While most property investors start their journey using negative gearing – ie the rent they receive doesn’t quite cover the mortgage repayments – this changes over time. Once they start paying down their loan and the market rises, their equity grows and the income they receive increases to the point where it outstrips repayments.
When that happens to your investment, you’ll start earning passive income which can supplement your other earnings and eventually, when you retire, even replace your income altogether.
For this reason, your wealth as a property investor usually depends on:
How soon you purchase
The market conditions you purchase in
How many properties you own, and
How long you hold onto your properties for.
That said, there’s no set number of properties to which you need to aspire. You should always base the size of your property portfolio on your own circumstances and financial goals. You should also be prepared to be flexible. There may be times you’ll want to sell a property and rationalise your portfolio, especially if you’re changing your investment strategy or you need the capital in your property to meet other goals.
Information for this article has been sourced from The Property Investors Alliance.