Buy Now. Lloyd Edge
every day I help my clients pursue similar strategies. Throughout this book you'll find real-life case studies that illustrate what you can do to pursue your own goals.
STARTING OUT
Maybe you picked up this book because you're ready to buy a home. Or perhaps you can't afford to buy where you want to live, so you're looking for investment options to build equity.
You may be afraid to borrow money to invest. You can mitigate the risk by doing your due diligence (discussed in chapter 10), and by always buying in an area with low vacancy rates and lots of demand. That way you'll be sure to find tenants. In almost 20 years as an investor, I've rarely had trouble finding tenants for my residential properties.
If you're just starting your investment portfolio, you could look at a capital city like Adelaide, for example, or a strong regional city such as Orange or Toowoomba, where you can still find yourself a property for $450 000 or $500 000. With a 10 per cent deposit plus stamp duty and legal costs, you could get into that property for as little as $60 000 to $70 000.
If you're already a property owner and you've saved up a bit of money by putting extra into your existing mortgage, you can redraw that equity from an offset account and look at using it to get into another property. That's a great way of looking at things, and I go into it in more detail in chapter 3.
I spent years learning how to invest, but by sharing the strategies I learned the hard way, this book will help you get started right away.
Aside from leverage, which I'll talk about in chapter 3, the other fantastic thing about investing in property and applying different strategies to suit your various properties is that, even though you're essentially creating a physical asset, you can remain pretty ‘hands-off’ in the process.
I started investing while still teaching full-time. Later, when I had retired from the nine-to-five, I set up my buyer's agency business. So I wasn't researching properties for myself 24/7. I was doing enough research to find the right investment property; then once I'd bought it and put tenants in, I'd have a property manager managing those tenants and the property.
Buying and developing property involves enlisting a team of experts, like a property manager, from diverse fields. I call them my ‘dream team’ (more on them in chapter 2).
The dream team is there to help you successfully finance and purchase properties, and meet a multitude of legal and practical requirements, on time and within budget.
You need to do all the due diligence on the property you want to buy, but once you've signed the contract, you bring in professionals to look after it and you move on. You appoint a property manager, who will find and look after the tenants. If you're building a duplex, it's essential to have the right builder on board for what ideally should be a stress-free and largely hands-off process.
It's vitally important that you work with people you can trust to act in your best interests. When you surround yourself with reliable professionals, you can find yourself using them over multiple projects spanning many years as you build your property portfolio.
Nowadays I hardly ever hear from my property managers unless a particular problem arises, because they look after everything. So it's out of sight, out of mind. With trustworthy people looking after it, your portfolio pretty much runs itself.
So yes, even in your busy life, you do have time for this. By the time you've read this book, I'm confident I will have convinced you that you have nothing to lose by taking the plunge. There's really nothing stopping you from getting ready to buy now.
CHAPTER 1 THE POWER OF WHY: To get it, you must know why you want it
As I've noted, for me it didn't happen overnight — it took 15 years. Could I have done it any faster? Yes. I made some mistakes early on that set me back. That's why I wrote this book — to show you how to create and meet your investment goals without making those rookie mistakes. In fact, it took me less than 10 years once I actually had a strategy in place and put my mind to it. So my main message is simple: if I can do it, so can you.
Over the past two centuries about 90 per cent of the world's millionaires have made their millions by investing in real estate. When it comes to creating wealth through property, however, it is not about going out and buying just any property, then sitting and waiting for your wealth to build. It is a long game — one that you plan and work for one step at a time. It involves psychology and a strong belief — it's something you must really want.
What I came to realise in my early career as a property investor was that all successful investors have personal goals to track their successes, and that they grow their portfolios steadily based on long-term strategic plans. With that kind of long-term focus, strategic investors can buy more properties, enjoy greater serviceability and create greater wealth over time.
GOAL-SETTING
I was fortunate in that I was already a goal-setter. From my background as both a musician and a golfer, I knew how to set goals and meet them through hard work and determination. So forming a strategy was the natural next step for me. And it worked.
Looking back over 20 years, and especially the past 10 to 15 years, I always set myself goals. For example, ‘In five years' time I want to have built this much wealth’ or ‘In 10 years' time I want to retire from teaching, and these are the investment strategies I'll use to achieve that’ or ‘I want to get my real-estate diploma in one year instead of three’. And I held myself accountable for those goals and strategies.
In fact, through my determination and willingness to work all hours of the night while holding down a full-time job, I gained my Diploma in Property in just three months.
I'm not suggesting that everyone should follow in my footsteps and buy 15, 20, 30 properties. Nor is it my advice that you should set your sights on becoming a multimillionaire — your goals may not run to that. What I'm talking about (and I'll share plenty of real-life illustrations in this book) is that you pursue your own goals, which might mean a strategy that you build a nest egg of three or four properties. If they're cashflow positive and see good capital growth, they should provide you with a steady income stream to fall back on if you lose your job or your business is shut down or you get sick and can't work.
You need to be clear on your reasons for taking this journey as well as the belief that you can do it — and you need to start developing both as early as you can.
LIFESTYLE CHOICES
I own a buyer's agency called Aus Property Professionals, but being a buyer's agent isn't really what I do, and it's not what I tell people I do. What I offer my clients is the means to achieve an outcome, which is the end goal they themselves have identified. So when people ask me what I do, I tell them I actually create lifestyle choices for people by helping them to create the equity that will eventually allow them to realise their dreams.
This is about much more than buying property. From my perspective, property is just the vehicle. Property, the stock market, gold or oil — they're all just vehicles. It's the outcome that's