ResidentialPropertyInvestorsClub.com

Currently there is about 6.8 billion people in the world and out those people just 10 million households worldwide have at least $1 million US in invest-able assets excluding their own home. So why is it that such a small portion of people are actually doing well financially? The answer is simple. They found out what the rest of the world was doing and did the exact opposite. Most of us do what our parents did and their parents did before them. They get a job (any job will do), get a loan for a house and furiously try to pay the home loan off so one day they can own the title. Most property millionaires understand things a little differently. You see, you never truly own your home, and if you don’t believe me just stop paying your rates bills.

Most real estate millionaires build there wealth through leverage. Its all about control, not ownership, and as soon as you understand this the better off you will be. Instead of buying one home and paying it off as fast as they can, the savvy property investor will leverage themselves into controlling as many well located properties as they can. Risky you say, well life is full of risks, but whats more risky doing nothing and failing, or doing something and risking temporary defeat.
A good way to negate the risk of making the wrong choices when investing in property is to have a good team around you. The costs involved in hiring the right property professionals are more than paid for in the services they can provide in helping you buy the right properties for your investing needs at the best possible price and terms. Well over ¾ of the worlds millionaires invest heavily in property, will you be one of them?

Latest figures show that Australian house prices are again on their way up, if this trend continues the average house price has only fallen by 3 per cent compared to 30 per cent in the US. How can Australian residential property prices hold up so well in this massive global downturn? It all comes back to the most significant property price driver, which is the law of supply and demand. Put simply, America has more dwellings than needed and Australia has not built enough.

Well located properties are currently being snapped up by first home buyers who have suddenly found that owning a home is now often  cheaper than renting. First home buyers are the ones to watch as they affect the market more than any other group. In a typical property cycle upswing first home buyers will hit desirable suburbs by purchasing the affordable properties within these areas. Investors will then follow, then once that area becomes seemingly less affordable due to competition the first home buyers turn to the next affordable surburb,  and on it goes.  The cycle always starts close to capital cities and then ripples out.

So if we are  now at the bottom of the next upswing, it makes sense to start buying property in well located areas before the herd arrive. Once they do, move to the next well located suburb you can find, always staying ahead of the first home buyers.  I do believe that we will see double digit growth again by the end of this year. If you wait until property becomes the flavor of the month again  you will most likely miss the boat as many did in 2003. Stick to the basics by purchasing the best possible located properties you can at the right price and watch your asset grow.

With interest rates falling to the lowest levels that many of us have ever seen, we are now presented with the opportunity to buy well located  capital growth investment properties that will cost you next to nothing to hold. Some will even put weekly cash-flow in your pocket from day one.

To find cash-flow positive investment properties in last six years, you would have to go a fair way inland to areas of low population, no jobs and little infrastructure. Not the best mix of attributes to base a secure property portfolio on. But in recent month the tables have started to turn. Lack of supply in sort after areas with great fundamentals, such as schools, employment and transport has increased rents significantly.

I have just fixed a few of my property loans with one of the big four banks  at 4.99% for 3 years, and in coming months we may see other lenders offering similar rates or even lower. I am finding properties on the market now in areas with  great fundamentals between Brisbane and the Gold Coast for sale that achieve 6%+ rental yields. With figures like these the rent achieved could cover the mortgage, rates, and outgoings, leaving you with a property that takes care of itself.

  Throw in the mix some creative strategies, like a quick cosmetic renovation to boost the rent and property value even more and then just count the dollars coming in week after week. Ah, isn’t residual income sweet.

Beach side of the Gold Coast Highway 1970′s built unit blocks are in plentiful supply in some of the more sought after areas such as Broadbeach, Surfers Paradise and Main Beach. These well built, but often tired looking buildings have a lot more going for them than just being an affordable option to live walking distance to the beach. Quick profits can be made by buying one unit or a whole block, when undertaking a cost effective cosmetic renovation and then either renting or on selling the finished product. Unrenovated two bedroom properties in the these suburbs are currently selling in the low $300k’s, and the right sort of renovation you can add up to $5 value for every dollar spent.

Body corporate fees are much lower than modern high rise apartments, often below $20 per week whereas with modern high rise apartments you can pay many $100′s per week. Land value is huge in these underdeveloped blocks, on some beach side 600 square meter blocks you will find only 4 or 5 units, but the land may be zoned for between 7 and 30 stories.  This is where I see huge future profits, in the development potential. After all, beach side land is in finite supply, and Aussies will always gravitate towards the surf and sand.

Sub prime meltdown, stock market crash, superannuation dives. The global financial crisis looms over us and it seems every time you look in the papers or turn on the television there seems to be more bad news and reasons why you cannot prosper, but you can. In 2001/02 Australia had its biggest ever property boom. Some say the parties over, I say they are wrong.

Back in 01/02 the doubling and in some cases trebling of many residential property prices is attributed to a couple of major factors. Firstly a lowering in interest rates made borrowing cheaper. Secondly the then government introduced the $7,000 first home owners grant. Once again interest rates are falling and the government has just announced the doubling of the first home owners grant on existing dwellings to $14,000 and $21,000 on new dwellings. Right now there are other factors which I believe will push property prices even higher. The share market is predicted to be in trouble for some time to come. Investors however do not just stop investing, and you can bet they will not be parking their funds in the banks for low interest and highly taxed returns.

In the year ending June 2008 Australia built 43,000 fewer dwellings than required. If this trend continues Australia will start experiencing a major undersupply. Well located residential properties are now experiencing low vacancy rates which in turn is putting upward pressure on rents, coupled with some excellent tax incentives for investors. Right now the more well informed and sophisticated investors are snapping up these great opportunities.

Using the old adage, “buy at the bottom” has always been a great wealth builder as you beat the herd before they jump on the bandwagon and once again push property prices up. No I do not have a crystal ball so all we can go on are the facts and in my mind all signs point to right now being one of the best opportunities that most of us will ever see to build significant wealth through Australian residential property.

This is an excerpt from my new mini ebook “Million Dollar Strategies For Residential Property Investing In Australia” To claim your free copy please fill in your name and email in the form provided at the top right of this page and you will recieve an email directing you to the pdf version.