Investing in bricks and mortar is a popular wealth creation strategy. However, many investors do not proceed past 1 or 2 properties. The Australian Taxation Office (ATO) reports that approximately 8% of the population have investment properties. Of these, 72.8% only have one property, 18.9% have two and only 0.9% have 6 or more. Why?
The elite 1% club is widely accepted to contain only exclusive investors who have six or more properties in their portfolio. What? 6! This may seem an impossible goal if you are yet to start on your property journey or feel challenged managing just one property!
Fear not, help is at hand… Are you ready to roll up your sleeves and seriously take action now to secure your future financial freedom? Yes? The following will assist in turning ‘the impossible’ into ‘achievable’.
It may seem initially daunting, however preserve and reap the rewards.
1. Review SPENDING Habits
Do you know where every $ you spend goes? Bank statements and/or credit card statements are a great place to start, however what about the incidentals or expenses from cash withdrawals?
Grab a notebook and for just one week, record every expense you incur, from the bus fare to morning coffee and dinner out. Costing these and bank statement expenses out over 12mths and comparing to your 12mth income will give you a great place to start analysing where savings can be made.
2. Identify SAVING Opportunities
Now you have identified where your money goes, you can review what changes can be made to secure your financial future.
Consider you have a morning and afternoon coffee as well as purchase your lunch during the working week. This could easily amount to $20 a day, $100 a week or $5,200 a year! Consider how removal or reduction of these small expenses could greatly enhance your savings.
Where else could you make savings? Do you really need Pay TV? Can you reduce the amount of times you go out to eat or drink in a week? Small sacrifices can really add up over a year, getting you well on your way to a financially secure future.
It is important to build in rewards for your discipline. Too much restriction will likely see your commitment fade. Perhaps you will treat yourself to coffee twice a week or lunch out once a week.
Developing a realistic budget and regularly reviewing is very useful to ensure you stay on track and have visibility into your progress.
3. Set GOALS
Ensure you have documented clear goals of what you want to achieve, a detailed action plan of how you will achieve your goals and realistic timeframes of when.
Refer to next week’s blog for goal setting tips…
4. Consult EXPERTS
Successful property investors surround themselves with relevant experts and tap into their skills and knowledge when required. Your team could include Accountant, Solicitor, Financial Planner, Mortgage Broker, Property Mentor, Real Estate Educator etc.
5. Secure The RIGHT Finance
With so many different types of loan products available, seeking out an effective mortgage broker with experience in investment lending can help you navigate products to achieve your goals. Taking your information documented in Steps 2 and 3 above will give you a head start.
For more property investing tips, ‘like’ our facbeook page ‘Real Estate Investing Australia’.
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