There are many strategies for successful real estate investment that have stood the test of time. The fact that many of the richest people in Australia and probably in many other parts of the world have made their fortunes in property is testimony to the value of investing in property. In fact, I believe that a sizeable portion of every balanced investment portfolio should include income producing real estate assets.
Having said that, I should also point out that I am not a one-eyed property investor either. Real estate is just one of the vehicles to invest in, albeit an important one in my opinion. Shares and Cash type investments are also important elements of every balanced portfolio. The key is to understand the timing of the various investment vehicles so that you can, as far as possible, gauge the best time to enter each type of market.
When it comes to real estate, there are also many different forms that your investment can take. It is important that you understand your personal psychology and investor profile. For example, are you more interested in being actively involved with your investments or are you looking for passive investments? How do you respond to market fluctuations? Are you interested in holding for the long term or do you want to trade? Are you a property developer, rennovator or an investor? Do you want to buy new or old? What returns are you looking for? Are you into residential, commercial or industrial real estate? If residential, do you prefer, units, townhouses, villas or houses? If units, do you prefer smaller complexes or highrise developments? Do you invest close to the city or in the suburbs?
I have invested in property for more than twenty years and have tried lots of different strategies. Some were very successful and some resulted in great learning experiences. I have also studied many different strategies from teachers such as John Burley, Robert Kiyosaki, Robert Allen, Raymond Aaron, Mark O Haraldson, Barry Black, Alan Falkson, William Nickerson, Jan Summers, Steve McKnight and Rick Otton.
My
Super Secrets® to Wealth do-it-yourself real estate investment home study course teaches how a person on an average income can build a real estate portfolio in excess of a million dollars within ten years by investing in lower priced positive cash flow properties. The success strategies you will discover in this course are not a guarantee to instant wealth, but if you have the vision and discipline to implement these ideas consistently, you will be rewarded beyond your wildest dreams.
Here’s an extract from an email I received from someone in Perth who shared his success with me recently:
“Hi Hans. Just thought I'd let you know that the other day I drove past one of my units and saw a For Sale sign. Rang the agent and found out that a unit about the same size as mine was for sale. The price was $77,000. It was to be advertised the next day but he already had a cash offer over $70,000. Well guess what? The unit wasn't anything special and I bought mine for $57,500 in May last year. Not a bad return in 8 months!”
A Victorian student recently picked up two bargain properties in Queensland. One was for $59,000 and the other for $72,000. The RTP’s where 477 and 575 respectively. He said: “I’ve learnt a lot. I am pleased I haven’t compromised my wealth options.”
Probably the question I am asked most often whenever I suggest to people that they can enjoy better cash flow returns from their real estate investments when they invest in older properties further away from the city centre is “what about the capital growth? . . . We have always been told that properties near the city centre appreciate more than those on the outskirts.”
This is just one of the many myths that abound regarding real estate investment. Another one is that you should always buy new properties to get the biggest tax benefits. (You have to question the wisdom of that advice when you need to pay between $80,000 and $150,000 more, just to get the tax deduction!)
Research I have done indicates that over time there is only about a 1% to 1.5% difference between the highest growth suburbs and the lowest growth areas. It doesn’t all happen at the same time however.
In the
Super Secrets® to Wealth do-it-yourself Real Estate Investment home study course I explain that real estate increases take time to work their way through the suburbs.
It’s a bit like throwing a pebble in a pond.
Do the ripples created by the pebble stop moving partway across the pond? Of course not! They move all the way out to the edge. It just takes time for them to get there however. It’s exactly the same with real estate prices.
Three years ago the newspapers were saying that you should buy in the eastern and inner suburbs of Sydney because prices were rising. They said you shouldn’t buy out west because prices hadn’t moved for many years. It was all doom and gloom and who knows if real estate will ever rise out there again.
“What a great opportunity!” I thought to myself and went shopping for bargains. I knew it was only a matter of time before prices would rise out there.
Recently the papers were reporting price rises of more than 20% in Penrith and many western suburbs of Sydney. (What a surprise!) Now they were saying that people should buy out west because prices were rising and the boom is on!
I don’t know about you, but my strategy for growing wealth is to buy low and sell high. It seems to me that the papers are telling you to do the exact opposite.
I’m a contrarian. I do the opposite to the crowd. I do the opposite of what the papers suggest we should do.
Most people would probably agree that Sydney’s real estate prices would be the highest in Australia. Typically the types of properties I buy are two and three bedroom units, villas and townhouses with a lock-up garage in Sydney for less than $100,000. In other areas the prices are less than those in Sydney.
Now, often when I talk about this to people, they say things like: “that’s impossible!, or I’ll bet they are in need of major renovation, or I’d like to see that.”
Well it is a reality and it’s what I teach in the
Super Secrets® to Wealth course. These are not dumps. They are not properties in need of major renovation. Sometimes they may need a coat of paint, but that’s about all.
They are average properties, in average suburbs that you can rent out to average tenants at average rents. They are also the types of properties that you can rent or sell in good times or bad. They are the types of properties that allow you to play the game for the long term. The principles I teach apply to all major cities in Australia and in fact in many parts of the world. The principles and strategies are easy to follow and implement.
Here’s what another graduate of the
Super Secrets® to Wealth course wrote recently:
“Just thought I would let you know I’m still at it. Been looking continuously for property and today I also have settlement of my latest unit.
Wrote to the bank as you suggest. They were very impressed. Both properties I brought last year have skyrocketed in price. Rents have also gone up. I can’t believe capital growth at 30+% can last much longer. At least I have the equity in those properties now and not in 6 years time. Talk about encouragement to buy more!”
The beauty of this course is that it teaches you how to do it yourself. The course comes complete with a 52 page workbook and 6 hours of audio tape recording so that by the end you’ll know exactly where to find the real estate bargains and how to negotiate to buy them. The worksheet templates are there for you to copy so that you can do the calculations on each property that you are interested in purchasing.
About Hans Jakobi
Hans Jakobi is an educator, author and investor. He is the author of six best-selling books including,
How To Be Rich & Happy On Your Income which is available at:
www.supersecrets.com and the presenter of the Super Secrets® to Wealth do-it-yourself real estate home study course. Join Hans Jakobi’s FREE Super Secrets® Online Newsletter
© 2002 Hans Jakobi. All rights reserved worldwide
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