If you are an existing home owner looking to multiply your assets, shorten your housing loans, give your families better lives, and take the first step to comfortable retirement, The following advice will be PERFECT for you!
This stage of property investment involves a lot more transactions. You might need to sell your current house to cash out your profits, or go to the bank to refinance and bring out those profits. The whole purpose of doing all this is to awaken all your sleeping funds to make them work hard for you. Only by understanding how much funds you have, will you have an idea of how many properties you can invest in. You can choose to have a mix of properties that ‘grow your funds”, or properties that generate rental yield.
WARNING: Now that you’ll be holding more than 1 property, your short-term income commitment is a lot higher. If you apply the (SAYE) strategy, you may find it too much of a burden for you to commit every month.
If you’re disciplined enough to commit a portion of your income every month, but you choose to park them all in rental yield property, it may delay your wealth growth. So at this stage, you have to really plan well so that you don’t over commit your income, or play it too safe and lose out on golden opportunities.
Another key thing you need to do is to maximize your loan to leverage of other people’s money to make you richer faster. Wait… getting more loans? You may be thinking that I’m crazy to suggest that. After all, the point of property investment is to get rid of your loans fast right? Hold your horses first, getting loans at this stage can actually help you tremendously.
First, understand that there’re good debts, and there’re bad debts. At this stage, you want to take on good debts. According to Robert Kiyosaki:
“Good Debts bring in money to you every month Bad Debts take money from you every month”
- Getting loan to invest in property that gives you rental as income every month is good debt.
- Getting loan for a car that does not bring you any income is considered as bad debt for most people. (Unless your car can generate you income, like a Taxi)