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Karen Wheller

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Home arrow Blog arrow Can you become financially free fast with property investing?
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Can you become financially free fast with property investing?

Investing in real estate is not a new path to financial success. It is a well worn path and it is so well worn because it is such an effective way to make a great deal of money in a relatively short period of time, if you buy in the right time – more about this just now. But you have to be a forward thinker to make any serious money in the buying, selling or renting real estate.

The objective is to buy low and either sell high or have loads of rental income that you can live on for the rest of your life. That means that you must have the knowledge and understand markets extremely well and a few other things such as simple legal concepts and some tax and structures etc.

Some will say that you have to make educated guesses. I say you have to know your market and be knowledgeable enough to make sound and educated decisions.

There is always risk in any decision, the world does not work in 100% absolutes, but what would you rather risk 100,000 or 1,500,000?

It doesn’t take much thinking to say that 100K is far safer to risk than 1.5 million and much easier to get out of if you make a wrong decision.

This is the reason why education in property investing comes first, capital second and then investing third.

If you doubt this for a second think about this:

1.    Would you risk your capital that you already have and worked hard for because you are making decisions that are merely guess work?

2.    Or would you prefer to learn first and then invest while making educated decisions knowing that these will bring you financiall freedom in a certain amount of time? (As a totally separate matter, it is also true that with the right knowledge you can scientifically know exactly how long it will take you to be financially free with property investing)

You see, some say that capital comes first in investing, because you need something to invest, and in this sense they are correct. I won't even discuss leverage to the hilt to become financially free, because this system of leverage in the last 2 years has created great grief and financial tourmoil to those that belived that 108% mortgage bonds will make them financially when the time came that they couldn’t pay those bonds.

So, back to the beginning, even if you have capital and worked hard for it – property education should be the first thing you have to start doing to become financially free fast. Education is the only thing that will enable you to optimize on your money, rather than get low returns, and risk your capital for no good reason other than lack of understanding about property investing.

Then comes the investing.

Assuming that you already have some capital, or you are learning how to generate capital (e.g. income to invest), now you need to learn when to invest.

This is when you start understanding how to become financially free fast. 

The next secret is actually not really a secret, unfortunately very few people take this fact seriously:

You buy low and rent for profit/cashflow from day one. The income sets you financially free. Simple right! 

The only question is how low and when is low really low? (Buy the way, this is also a frequent question in the stock market, but in property it is easier to see and predict than in the stock market).

You guessed it: in depressed markets like at the time of writing this blog. The more depressesed the market the cheaper the properties you will find and the more tenants you will have because people do not buy to own a home and most people rent in such times.

If you buy in depressed times, when property is cheap, you buy MORE property for less money. Coincidentally, as I mentioned before, it is also when the rentals are high which also means you are likely to make CASH FLOW right at the beginning with all the properties you buy. If you learned how to buy correctly. (As a side note: don't think that even in depressed markets people can't be fooled into buying at high prices - simply because they don't know how to evaluate the deal and believe everything a real estate agent or seller tells them).

And if you buy a lot of property really cheap and you get income rentals from all of them and you have enough capital to do this in depressed markets, then you can become financially free pretty quick, actually in several years. It is easy, it can of great help to those that can’t sell to find any buyer to get them out of trouble, and it can be very rewarding to know you did this in 2 or 3 or 5 years and you don’t need to work ever in your life again.

Sounds simple, right!!! So then why isn’t everyone doing it.

Simple, amongst many reasons there are two very common:

1. Because everyone buys mostly when the hype is up and the properties are expensive, they do this to speculate – not invest in their future.

2. Because people do not prepare themselves cyclically for a downturn.

In other words, they do not stash away enough cash in the boom time (while sustaining from purchases) to BUY FAR MORE PROPERTY in the down turn and have cash flow instantly.

The reason why people don’t do this, amongst other reasons is because they don’t think far enough, they don’t plan far enough and they do not enducate themselves about property.

It is easy to become financially free in 2 to 5 years, but it is hard, if not impossible without knowledge about property and a solid long term plan and strategy.

Rich people know this, they get richer every day. Anyone that invests in themselves and educates themselves can become rich easily because they know what they are doing and every action is planed correctly to a desired outcome. Think about this for a second.

You may be able to do this also, but you will need to have a long term plan a strategy and even if you did not buy in this downturn, remember: down turns are cyclical, markets go up and down you will get your chance the next time around .

The only question is - if you didn't generate enough wealth through this downturn, will you learn about property enough to do it in the next cycle?

Will you take the down turn as a good time to learn everything you can about property investing so that you can buy right and become financially free really fast?

Now you have one place on PIN Campus where you can get all the property investing education that you need and many investors every month are choosing to learn to accelerate their investment to financial freedom.

Comments
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Sue - Know your property     | 165.146.34.xxx | 2009-03-17 04:14:45
I have to agree with a lot of what you have written hear, most people going into property do so with their eyes closed. They forget about certain facts and cases like tenants not paying do they have the money to cover in case of this etc. Thanks for and interesting read a lot there to keep in mind thats for sure.
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