buying property

[jiefoun]

Real estate is one of the most profitable business sector. Investing in real estate is a popular investment vehicle. While excitement about real estate investing has been tempered due to the mortgage crisis, property prices are falling to the point where investors are once again thinking buying real estate. Buying property can be a great way for you to be wealthy.

[kadentrom]

Buying real estate is what you do when you want to own a property. As owner, the property is for your sole usage it is yours to use when and as you see fit. Time share real estate performs under the same basic principle, besides you are a part of a group ownership instead of the sole owner.

[jiefoun]

i agree! buying property can be a great way to be wealthy.

[conmonroy]

true.. and it's also an investment..

[jiefoun]

yes, i agree..and it's great investment...

[jordonpat]

Real estate is the biggest growing business in today world, lost of peoples in these days invest in property because the return of money is guaranteed.

[Thejeongus]

Yes I agree that property is a great vehicle for wealth...the unfortunate thing is, most people don't know how to drive it. I'm not sure what level people are at with property investing (in terms of knowledge and experience) but I have a few observations about property that is very contradictory to what is widely thought...

Firstly, most people that got into property recently really shouldn't have, leading up to the GFC there was such a hype about property that many mum and dad investors got in without really knowing what was going on...As Robert Kiyosaki says, now that the GFC has hit we will find out who the real genius's are.

Best wishes to all those that got into property over the last decade, I hope that many of you were able to get some AWESOME gains, however I think people need to reevaluate WHY they got into property. (Incidentally, when your typical mum and dad investors start entering the market, that's a sure sign that the ships already sailed and to start looking to lock in what you have).

Many people over the years got into property for the CAPITAL GAINS, which are great when they are coming in such huge numbers as they did recently, but those times are over for a while now. As we have seen recently though, property doesn't always go up and we have seen alot of people crumble under 'mortgage stress.'

The main reason to buy property is for CASHFLOW...now this is very common information nowadays, but I also believe that it goes deeper than that. People need to look at WHY They are buying property and how they go about doing it. For example, most people will reach some kind of 'ceiling' with their lending (meaning banks won't lend more to them after a certain amount...OR they run out of cash for deposits or equity). This means that your property wealth is limited for a good period of time...and if you peak at say 5 properties bringing in $100 per week in positive cashflow (difficult to achieve), you are limited to around $500 per week in income. Which isn't bad, however, how much have you borrowed or tied up to achieve that little gain?

For example, would you spend $400,000 (Plus!) to buy a money printing machine that only prints $100 per week, regularly needs repairs (in property terms, maintenance, loss of tenant, rates etc) and won't go up greatly in value for some time???

If you look at the wealthiest people around the world, the majority of them have got money in property...but have a closer look as to WHERE they got their money for property. Unless they were a developer or something like that, generally these wealthy people got their money from a business or some other form OUTSIDE OF PROPERTY.

What does this mean???

The wealthy (those people that we want to emulate right?) use property to PARK EXCESS MONEY and LOCK IN THEIR WEALTH! Meaning, when they have a spare million or two, they could use that to purchase property, save on taxes AND lock in passive income from their money. They are also not limited to what they buy or how many properties they can own!

That's not to say there isn't benefit to everyday investors (there are some very clever ways to make money from property, with the biggest returns going to those who can raise capital - that was a hint by the way haha). But Brad Sugars (who owns and runs the number 1 business coaching firm in the world...he's also from Brisbane) says that unless you are making $500,000 a year in income OR you have passive income coming in, you shouldn't focus on INVESTING...but instead FOCUS ON MAKING MORE MONEY.

This is a very big topic and there is so much more information to consider, however, I hope this lengthy post helps people consider WHY they're buying property and not just buy it because it's cheap or popular.

Cheers

[EmilyF]

If you look at the wealthiest people around the world, the majority of them have got money in property...but have a closer look as to WHERE they got their money for property.

Interesting stuff, New Boy. I think you might just have convinced me to never own my own house. Not sure if that's a good thing or a bad thing. It means I might get cold at night but at least I have the kickback that there will always be cash left for partying, and who needs somewhere to live when there's a party to go to? In seriousness, this is a fairly thoughtful post. Thanks.

[Thejeongus]

It means I might get cold at night but at least I have the kickback that there will always be cash left for partying, and who needs somewhere to live when there's a party to go to?

Hey Emily, firstly and most importantly...I don't know how you could be cold when you're partying, every party I've been to has been very...hot! (haha).

I hope I haven't convinced you not to buy a house, just think about why your doing it really...thanks for your kind words (I think), you do have a way with them by the way :P Where are you from and what are you on here for?

Cheers,
Chris

[The King Game]

Hey Emily, firstly and most importantly...I don't know how you could be cold when you're partying, every party I've been to has been very...hot! (haha).
Chris

Trust me Chris, she is cold. Cold as they come.

[Thejeongus]

Haha, ouch!!!