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How do I increase cash flow and capital gains by investing in property? |
I recently graduated with a BSB in accounting. I want to increase my passive income by becoming an entrepreneur. I currently work back office for an investment/banking firm. I don't want to be stuck paying taxes before I pay myself forever and I believe that working with investment property is the best way for me to do it. I just want to know how to get started and how to gain the knowledge and capital necessary for such an undertaking. You are actually asking three questions. You want to pay yourself before you pay the government, you want to become independent, and you want to accumulate wealth. For a limited amount of time, you need to put paying yourself before the government, deferred compensation, on the back burner. By far your largest current expense is your shelter. This might be an apartment or house. Opportunities vary from place to place, with real estate values currently going though an adjustment, or falling, in some places. If you live in a large city, chances for investment are not as good as if you live in a moderate sized city or large town. Here is what I suggest. Invest in two things equally, your health and property. Never get so focused on wealth that you ignore your health. Being wealthy doesn't can't for much if you don't live to enjoy it. Start becoming a property junkie. Read the want ads, learn about fore closure sales, make a friend that works for a title company. What you are looking for is a duplex. As a young person, there are special programs for first time home buyers. A duplex can still qualify as a home, rather than as an investment. Move into one half and rent out the other. The rental income should cover most of your monthly mortgage. Don't make the mistake of spending what you are saving. You got a low down payment on the first property because it was a "first time home owner" loan. The next down down payment will be higher. There are currently many people who are going to loose their homes because they got in over their heads with the stupid adjustable mortgages offered by banks a couple of years ago. Find a property where the owner needs to crawl out from under the mortgage. With your good credit, offer to take over the payments and let them walk away to avoid bankruptcy. Then, quickly refinance with a fixed rate and move in. Now you can rent out the half of the duplex you were living in. Now, you have a positive cash flow on your duplex with the rental from both of them more than covering your costs. Make your monthly house payments, fix any problems, and put it on the market. As you do, start looking for another duplex or rental property. Be warned, this is not free money. Renters can be a stone cold *****. Talk to people who have rental properties and learn how they screen people and what safeguards they take. You have the benefit of age on your side. Have a goal and work toward it. For example, I want to retire to a good life at age???? Set bench marks along the way. Let someone else drive the new BMW now, you can drive the elegant Mercedes S class later. u can giv em money and i wil buy prime land in the philpens fo me, i just buy 1000m2 for 20 dolar a meter, for sur ethat land wil increae by 100% in next 5 years so, wouldn't you be looking for rental property then? you'd have cash flow while the property appreciates. Maybe you could get partners together to form a LLC and buy rental properties, both residential and commercial. |
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