2 minute read
PROPERTY INVESTMENT
PROPERTY
INVESTMENT Ernes Stander, Property Investment Coach “I will invest 33% of my income towards your retirement” -Tenant
I clearly remember as a child how my dad encouraged my siblings and me to save some money during the year so that we would be able to buy nice things over the December holidays. His favourite strategy was to match us for every Rand that we saved. A guaranteed 100% return on investment was a no brainer! As I got older, I started looking for similar investment opportunities and almost lost hope. That was until I found and understood property investments. market’’ and “interest rates are low”, but is that enough reason to invest in property and does that by itself make property the best investment for you?
Below you will find my three favorite reasons for investing in property, and why I believe you should too:
1.
The lower the risk, the higher the return
Property is the one investment were the lower your risk is, the higher your return will be. What is the difference between a low risk or higher risk property? The risk factor lies
in the price that you pay for a property. ,If you overpay on a property, your risk will be higher, and the return will be lower. So, the key to a good property investment is to buy a property below market value. This will make your investment a low risk, high return one and might even pay for your next destination holiday or dream lifestyle. I do, however, suggest that you make use of a property investment coach to help you find below market value properties in a good area. 2.
You do not need a lot of money to get started
If you want to buy shares on the JSE or any other investment platform you will need to have every cent available before investing, but not so with property. Banks are so confidant in the viability of a property as an investment that they will in many cases even lend you the full amount for the property that you want to invest in. This will leave you with a capital outlay of only more or less 5% of the value of your investment in order to pay the transfer costs of the property. What millionaires like most about property investment is that it is scalable; you can use the bank as leverage to keep on growing your investment portfolio.
3.
Your tenants are paying for your retirement
According to the financial advising industry one should save about 15% of your monthly income towards your retirement. Do you think the super-rich are saving 15% of their income in a Retirement Annuity? No, they use leverage to accumulate wealth and so should you. Multiple tenant pay on average a third of their income towards the investor’s investment portfolio in the form of rent. So, in short, you can either put 15% of your own income away for retirement or you can have 10 tenants that put 33% of their monthly income into your retirement portfolio.
The choice is yours.
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