Anyone who has an interest in Australian real estate likely knows that it’s been a huge factor in building wealth for millions of people across the country.
While we know that the long-term capital growth in property has been phenomenal, I still see new investors thinking about property in the wrong way.
Without a doubt, the biggest thing I still see on a daily basis, are people trying to get rich overnight.
Property is a long-term game and no matter what level you’re at you have to take it on with that type of mindset.
By most people’s standards, I’ve been very successful throughout my journey in property. I’ve been able to build a large property portfolio, but I still don’t consider myself rich.
I have a lot of debt, but I take it on in a strategic way. At this point in my life, if I never buy another property and just service my current debt, in another 10 or so years I’ll be sitting on a very healthy portfolio that would be more than enough for me. I know that now that I’ve laid the groundwork, time is my friend. I’m not trying to get rich overnight, I’m letting time do the heavy lifting for me.
The other big realisation that most people have to come to is that property is not necessarily the great driver of wealth that many people think it is.
When I say ‘driver’, what I mean is that for someone to actually buy and accumulate property, they actually need to have some money behind them. Most people who have some degree of wealth are able to generate a decent salary through a high-paying job or run a successful business with strong cash flows.
These people then use that cash flow to borrow and invest in property. Property is a great way to store and build wealth but you do need to have a decent income to get you there in the first place.
Oftentimes, when you hear about all the great things property, has done for people, you’re only getting a portion of the story. There’s no doubt property is an amazing investment, but you also have to be able to have enough income that a bank is going to continue to lend to you so you can keep on buying and growing your portfolio.
The reality is that you’re not going to be wealthy overnight from buying one property. It takes time and discipline to build a solid property portfolio. And it also takes a decent income to get you there as well. Along with the best buyers agents in Brisbane of course!
If you can put those elements in place and keep it simple, you will get there.
For me, I simply work on growing my business and my income and investing the profits into high quality blue chip real estate. I know that the locations I invest in have a long-term track record of growth, are always going to be appealing to tenants and will ultimately get me where I want to go.
But I still need to have patience.