EPI 041 – Rags to Riches in Property Investing

In this episode we talk about the joys of finding a good property manager, good tenant and good team members – how do you even know who is ‘good’ anyway?  We also talk about the perception of  ‘rags to riches’ property success stories and whether many of them are about good planning, good management or simply good luck!  We talk about diversification in property investing.

Things we talk about:

  • Property Managers
  • Finding good tenants
  • Diversification in property investing

Action:

  • If you don’t have enough time to keep up with the ‘property investing’ media, then check out our Facebook page where we’ll be showing you the best articles of the week that we come across.

Investing in rental property – the good, the bad and the ugly

rental-propertyInvesting in rental property is a great way to build wealth.

Both Den and I are committed to building our property porfolios as we see property as the best method for us to create wealth in the long term and to create a solid financial future for ourselves.

But it’s not all a bed of roses!  If you have listened to a few of our property investing podcasts then you would know that we don’t sugarcoat it!  There are times when I feel like just ‘selling up’ and cashing in – although, in my case, the bank still owns most of it, so that thought doesn’t stick around too long!

If you are someone considering getting started in property, then this article may help you to recognize the benefits and the drawbacks of investing in rental property as a wealth creation strategy, before you make your decision:

Investing in Rental Property – the Pros

Capital growth – This is the best advantage of all.  You purchase a property for a certain value, you wait a while and hey presto, it increases in value.  Capital growth is where you can really grow your net worth.

Rental income – The amazing leverage of using other people’s money to buy your rental property is coupled with the ability to use other people’s money to pay it off!   In some circumstances the cost of your rental property to you could be zero dollars per month and it could in fact even put money back into your pocket!

Taking control of your financial future – If the thought of working your whole life and then retiring on a government pension doesn’t fill you with joy, then perhaps the thought that you can actually take an active role in creating the sort of future for you and your family that you want will excite you!

A means to create wealth that you could not achieve through just ‘working a job’ – When you work for an employer, in most circumstances, you know exactly how much you’ll earn for the year.  There is limited capacity to increase that income and when it does it’s usually only by a small percentage on what you are already earning.  Compare this with the potential for massive capital growth that will far exceed the growth in your salary.  Compare this with the opportunity to leverage your existing investments to purchase others and compare this with the capability for you to earn income and experience increase in valuation where you may not have even lifted a finger!

Investing in Rental Property – the Cons

Dealing with bad tenants – Dealing with tenants who don’t pay regularly or at all, tenants who will more than likely not look after your property as well as you would and even tenants who can cause damage to your property.    All of these things can really make you question whether having rental property is a good idea.  It can cause stress for you, both emotionally and financially at times.

Having no tenants – This is an inherent risk of investing in rental properties.  Of course you can do your best to pick the right area, make your property presentable, advertise well and attract tenants, but there will be times when your property is vacant.  This can cause financial stress and the mortgage repayments still have to be met.

Tying up your money – For the most part you’ll need to put in a fair chunk of your own cash or equity.  Having property means that you will usually have some level of your money tied up in what is not a highly liquid asset.  So if you need to get some cash quickly, liquidating your property isn’t exactly a speedy process.

Need a significant deposit to get started – This is the one that holds a lot of people out of the game.  Worse still, people watch the property market growing at times, much faster than they can save, so it can seem like an impossible task to even break in.

Potential for value fluctuations – As much as we all like to speculate and put forward our views on what the property market is doing, no know can be certain of how property prices will fluctuate.  Sure, property prices are traditionally nowhere near as volatile as share prices, however, prices will go up and down.

Owning rental property isn’t for everyone, but there sure are some great benefits to be had.   Ultimately the decision on whether you would like to hold rental property is up to you and something where you’ll need to assess the pros and cons before deciding if this is the strategy for you.

If you decide to go ahead and jump in, then good luck!  If you think the bad side outweighs the good side for you, then don’t despair!  There are other wealth creation strategies that use property and may not include some of these downsides – ever thought of developing?

EPI 037 | Great Property Investing Goals for 2012 and more

Wow, another year gets started and you have to ask yourself some tough questions –

  • Am I really going to just doing the same things as I am now in another year’s time?
  • What do I really want to achieve with my investing and wealth creation strategy this year?
  • Do I even have an investing or wealth creation strategy??
Yep, it’s that time of the year that you need to set yourself some goals.

Things we talk about:

  • Property Investing
  • Evicting tenants
  • Property Development
  • Setting goals that inspire you!
  • Losing weight
  • Getting fit
  • Paying off your mortgage
  • Property investing goals

Action:

  • What are your goals?  Write them down.
  • Set up some sort of reminder system for tracking your progress
  • Head over to our EPI Facebook Page and tell us your goals

EPI 036 | The Everyday Property Investing Year in Review

Sometimes you forget about just how much you can and do achieve in a year!  In the final episode of 2011 Kaz and Den reflect on what they have acheived in property this year and share some of the big lessons they’ve learned.

Things we talk about:

  • Property Investing
  • Property Development
  • Renovation
  • Holiday houses
  • Buying your own home

Action:

  • Start thinking about and writing down your goals for the new year.
  • Head over to our EPI Facebook Page and like us!
  • Give us a rating on iTunes!

 

EPI 034 | Shares and Property: The right mix for successful investor Justine Pollard – Part I

Thought about diversifying your investment vehicle?

Today’s interview may make you think about doing just that!  We talk to accomplished author, expert share trader, keen property investor and soon to be property developer, Justine Pollard from Smart Trading.

Justine is inspiring with her story of investing, so inspiring in fact that I even purchased here Share Trading book (available on her website) after doing this interview!

Things we talk about:

  • Rich Dad, Poor Dad (Again!  This seems to be a catalyst for many a successful investor’s beginnings!)
  • Share Trading
  • Property Investing – in Australia and the US
  • Smart Trading – Justine’s share trading education site
  • Mastering Investments – the investing course that Justine put together with a bunch of share and property experts.  We have a massive listener discount special available on this course, a whole $300 of the regular price – check out the Mastering Investments Christmas special (until Dec 25 only!).

Action:


EPI 033 | How to turn your property investing into a great lifestyle forever

So you’re all geared up for property investing.

You’ve got a plan to grow your massive property empire?

Fantastic – but what’s your overall plan? What’s your exit strategy?  How much do you actually need to retire comfortably?

Well, listen in as we talk through ‘the big picture’ on how to turn your property investing into a lifestyle and how to plan for your retirement.

Things we talk about:

  • The slap – and how your perception creates your reality (oooo…esoteric!)
  • The cost of raising kids!
  • Property investing and your lifestyle
  • How to calculate how much money you need for a comfortable retirement
  • Exit strategies for property investing

Action:

  • Work out how much you need for your retirement
  • Determine if you are on track toward this goal and what you need to do to make sure you are!

EPI 023 | Interview with Ben – Everyday Property Investor

This episode Kaz & Den give you the latest with their property news – Kaz is all reno-ed out (but still has several weeks to go!) and Den is all pumped up about buying (again!!).

We have a great interview with Ben, who is an Everyday Property Investor.  Ben has a strong drive to succeed in life and so has tried and is trying his hand at many things – from building business to renovating and developing property.  You’ll be inspired at how a software engineer by day/jumping castle manager by weekend can fit in a few renovations and a development project!

Key points we talk about:

Actions:

  • Head over to the Everyday Property Investing facebook page join the conversation.
  • Give us a rating in iTunes – you will be in the running to win a 30min mentoring session with Den.
  • Review your goals and make sure that you have a clear ‘Why’ that will keep you motivated when things get tough.
  • Also – reward yourself!  Setting a reward that is appropriate for the goal and is meaningful to you will keep you going!

EPI 022 | What YOU want to know about property investing – Listener Q&A

SUBSCRIBE in iTunes: iTunes Store – Everyday Property Investing (NB: Need to have iTunes installed)

This episode let you ask the questions – we’ve compiled a list of great questions sent to us from the Everyday Property Investing community and we dedicate this episode to answering some of these questions.

We give you an update on what’s happening with Kaz & Den in property and we complain about the winter weather and having a cold!

Key points we talk about:

  • Property investing
  • Home renovation and renovation courses
  • How to have a portfolio that weathers a ‘global financial crisis’
  • Investing in rural areas
  • Positively geared property
  • What loan to value ratio (LVR) is good for you
  • Capital growth versus Rental Yield
  • Buying of the plan

We also tell you about our Everyday Property Mastermind group mentoring program as well as our Everyday Property Coaching one on one property mentoring service.  you can read mean about our property mastermind groups and property coaching and property mentoring on our website.

Actions:

EPI 021 | Property investing mentor – Interview with Medine Simmons

SUBSCRIBE in iTunes: iTunes Store – Everyday Property Investing (NB: Need to have iTunes installed)

21 today!  And in this latest exciting instalment…will Den finally buy something?  Will Kaz stop buying?  Will Den’s tenant actually pay the rent?  Will Kaz ever start this reno project!  All this and more!

This episode we fill you in on all of the project news and views from us, Kaz and Den and then we have an awesome interview with experienced property investor, published author, property mentor and girl with the ‘million dollar view’ of St Kilda beach, Melbourne – Medine Simmons!  Medine and Kaz caught up a little while back and talked about all things property.

You can read more about Medine and the products and services that her company offers at her website, www.medinesimmons.com.au.  Also checkout Step by Step Property Success for more details on her property workshops.

We have a great listener question via our Everyday Property Investing Facebook page from Fran and we give a few shout outs to our fantastic Everyday Property Investing community, who have been going great guns on the Facebook page, getting the conversation flowing.  If you have checked us out on Facebook yet, head over and hit the ‘Like’ button to stay up to date!

Key points we talk about:

Actions:

Renovation Update #3 – Planning, preparation and purchasing

Renovation update - planning our attack

Here’s another update on the Traralgon renovation project.  For those just tuning in, the basics of the project are:

Location: Traralgon, Victoria

Details: 2 bedroom, 1 bathroom

Purchase Price: $165,000

Renovation Budget: $15,000

Plan: To do a cosmetic renovation on the inside and outside of the house then rent the property out.  In addition to this we will have plans drawn up and a planning permit submitted for a three bedroom house on the back of the block then subdivide and hold that property also.  So it’s a buy, renovate, hold, develop, hold!


It’s just 1 week today until we get the keys and take possession of our Traralgon house.  We’re really looking forward to it now as we’ve done lots of planning, preparation and purchasing (the three P’s!).  We’re itching now to get in and really get things going.

Renovation Calculator and Renovation Planning Tool

I’ve spent quite a bit of time tweaking and fixing up my renovation calculator and renovation planning tool so that I can estimate our expenditure, plan our tasks and well and truly track our costs throughout the project.

Reviewing Quotes and Scheduling Work

We’ve received most of the quotes that we were waiting on – thanks to me sending a follow up sms to all of the tradespeople (worked a treat!).  We’ve selected our team for the most part and have scheduled in key tasks to start from the day of settlement.  The immediate plan is:

  • Settlement day (Day 0) – pull down fences to be replaced, bring kitchen doors back to our own house where we will be priming and repainting with laminate paint
  • Day 1 – Green waste to be removed from backyard (we’ve already cut back all of the trees and bushes and the waste is on the ground), tree stumps to be removed
  • Day 2 – Remove all walls requiring re-plastering, prepare all walls for patching
  • Day 3 – Plasterers come in to re-plaster and patch all wall and roof, fencing guy commences building the fences, remove lamipanel from bathroom walls in preparation for builder
  • Day 4 – Builder to commence re-building walls in bathroom with villaboard

Purchasing

We’ve got our master materials list together and have started to purchase materials.  I’m really getting into this part of it, I love the thrill of chasing down a bargain and cutting hundreds off our budget.

We’ve purchased all of our paints and painting related items so that once the plasterer has done his thing we can get stuck into the painting.  This week, we also visited a big auction house that has all sorts of renovation and building materials including kitchens, bathroom items, appliances, timber, carpets, laminate flooring.  It was renovators heaven!  I loved it and we purchased a bunch of stuff including an air conditioning unit, lights and carpet.  Just as an indication, we had received a couple of quotes for a budget level carpet and underlay and they had come in at (i) $1140 (including installation) and (ii) $1600 (excluding installation).  We purchased our carpet at auction, a top quality carpet, for only $395 (excluding installation) – what a saving!

I love renovation shopping!!