09 Aug Your Property Investment Concerns
One of our goals at Belouis is to make sure people just like you don’t look back on their life and wish they had done things that were easily within their reach. Our job is to help you take action by expanding your comfort zone, and reducing your fear levels. This week, we are going to talk about some common concerns and the realities of property investment.
Concern One – I’ll End Up With a Massive Debt
A fear of debt is not only sensible but useful. All of us have found ourselves in a situation where we have spent too much money and been in the scary position of not being able to afford what we need or desire. It’s a restrictive and terrifying position to be in, especially when you consider experiencing it long-term.
Property investment is about debt reduction, cash flow management and equity growth. Our consultants will talk with you about investment planning, budgeting and how to best structure your finances so that you end up with more money in the long term, without having to make huge sacrifices in the short term. After all, there is no point in planning for a retirement without debt if you have to live without enjoyment until then.
Concern Two – I Might Buy the Wrong Property
Many property investment advisors will tell you that you can’t buy the wrong property. This advice is based on generic statistics that show that Australian property has grown consistently in value over many years.
But you can lose money on a property.
That’s why we focus on high-growth areas, and properties people will want to rent. Rather than looking for a bargain in already developed high-value areas, we find property that is poised for growth but is in high rental demand already.
Often, it’s the people who try and find the best “deal” that end up with a property that is too old, short on modern features or simply not liveable. Sure, you can buy an old bungalow which is described by real estate agents as “charming,” but will people really want to live in it? How much money will you get for it monthly? And do you have a budget in place for all the repairs that older homes inevitably need?
Concern Three – What if Something Bad Happens?
What if there is a family emergency and you need to gain access to some cash quickly? Isn’t all of your money tied up in property?
Many people choose not to buy properties, either as investments or to live in because they feel like it’s a restrictive action to take.
In fact, the opposite is true, property opens more financial doors than you may think, let’s use equity as an example. In the event of a family emergency, you may be able to go to the bank and borrow against the equity in your property in order to gain some quick cash. If you have ever gone for a loan before, one of the first things the bank asks is, “do you own your own home?” If you do, then they feel much more comfortable lending you money, as the risk is substantially reduced from their point of view.
This also refers back to point one – the misunderstanding that property leads to a shortage of income.
Property investment has the potential to give you far more options than you have at the moment, along with the ability to grow wealth long-term.