Property investing: Create capital growth with this powerful formula
Every property investor is addicted to the idea of capital growth that increases wealth and leads to a long and happy retirement sipping cocktails by the pool.
There’s no doubt about it – you can retire wealthy from real estate, but you can’t expect the market to do all the work for you when it comes to creating capital growth. In fact, you have a bigger role to play than you may think.
The first step is buying the right property, and for this, I have a special formula. Introducing the 4 X Growth Plan.
In an ideal world if you get all of these four factors right, you’ll be laughing all the way to the bank.
NUMBER 1: CASH GROWTH
Buying a property that’s worth more than you pay for it is the quickest way to create growth. You haven’t even done anything and already you’re on your way up. There are many reasons people will sell a property for less than its worth and as investors that’s not our business why. Having your finances in order and offering a quick settlement to a seller who needs to get out of the market can result in you walking away with a property that’s worth more than you paid. Immediate growth!
NUMBER 2: LOCATION GROWTH
Location has always been an important part of growth in real estate. But as we see the effects of COVID-19, with people spending more time where they live, the liveability factor of a property is high on the list for potential growth. Look at what an area offers – is there a stunning view, are you close to the beach, do people aspire to live somewhere like this? The location needs to feel very liveable, very functional and be in an area that people have a high opinion of.
NUMBER 3: MARKET GROWTH
We need to buy real estate in a market that will grow – it’s as simple as that. The kinds of things that affect market growth are things like enviable locations, job and infrastructure investment and advancement, and opportunity. It’s a mistake to talk about the market in terms of a city such as Sydney or Brisbane – that’s too broad. Do some homework into the markets within particular suburbs to gain a greater understanding of how they move, grow and fluctuate.
NUMBER 4: BEHAVIOURAL GROWTH
This final growth factor is really about how well people live and what they have access to in an area. Is the area close to a beach? Are the parks and outdoor spaces well maintained, giving a sense of wellbeing? Is it a walkable area where exercise is encouraged and convenience is local? Are there great views, desirable neighbourhoods and well-funded social businesses and areas – for example, cafes, restaurants, playgrounds?
Put this 4 X Growth Plan in your investor’s tool kit and pull it out whenever you’re looking at purchasing a new investment property. Buying and simply waiting for the market to grow will not guarantee you the long-term returns that are required to create wealth.
But the 4 X Growth Plan is just one of many key property investing fundamentals you need to be across to be a successful investor.
For a comprehensive overview of how to create healthy and sustainable wealth through real estate join our FREE property investing seminar.
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Co Founder Positive Real Estate