Lets look at where most of us are going in our life – The truth may shock you!

Take any hundred people at the start of their working careers at the age of 25 years old…fast forward 40 years when they will reach 65, this is what will have happened, here are the facts:

ABS STATISTICS

1% are wealthy

4% are financially independent (and about 80% of these people achieved it by investing in properties)

5% will continue to work, not because they want to, because they have to!

36% will not be on earth anymore due to various reasons

54% will be broke relying on the Government welfare or even charitable contributions, etc.

To me its a shocking statistics, wouldn’t you agree? Do you want to be the 95% who are not financially successful or the top 5% who are financially independent? Or do you want to be like most people who are either dead broke or still working until 65 years old?

Imagine if you were shown precisely step by step to how build a property portfolio and Make a Million Dollars in 10 years that generates you an income month after month, year after year for the rest of your life…you could…

• Have the ability to build a successful property portfolio and live off it

• Travel around the world, to France, London, New York, and money keeps on coming into your bank account, more than even you could spend

• Spend more time with your loved ones, isn’t that what life is supposed to be about?

• Never have to worry about mortgage repayments or bills ever again

• Do the things you always wanted to do, walk in the park, play golf, travel. Wouldn’t that bring you great joy in life?

Success comes when the right opportunity meets action

Equity – Own a home and an Investment Property

Building a property portfolio remains a popular wealth creation strategy in the new decade, with one in seven taxpayers owning at least one investment property, according to the most recent taxation statistics.

Often people who have paid off all or part of their home borrow against the equity they have built up over time (equity is the difference between a home’s market value and the unpaid balance of the home loan) to finance the deposit for an investment property purchase.

Spokesperson for mortgage broke Mortgage Choice, Kristy Sheppard said recently that the firm’s latest property investor survey found 60 per cent of those looking to buy an investment property before mid 2011 planned to access equity in their home to find all or part of that purchase.

“There tends to be an ‘old school’ notion that repaying a home loan in full is a must-do before purchasing more properties”, Ms Sheppard observed.

“A family home is the biggest financial commitment, and asset, many Australians will ever have. So why not put it to work while you work on paying it off?”

“Of course, how much you can borrow is subject to lenders’ serviceability criteria as well as the amount of available equity, which works as security for the investment loan”, Ms Sheppard said.

In effect, this means you don’t have to come up with a cash deposit.

“It is important to note this strategy does require borrowers t take on a certain amount of risk”, Ms Sheppard warned.

“Before accessing your equity, it is necessary to establish whether you can comfortable afford higher loan repayments and which, if any, lender is willing to lend to you.

“So, its clever to consult a financial and tax adviser then visit a reputable mortgage broker, who can help you compare finance options and find a lender and loan product suited to your circumstances.”

Mortgage Choice identifies three common types of equity finance available.

1. Loan top – up – allows a borrower to increase their home loan amount in order to help fund another property purchase. Extra funds are usually made available via a lump sum payment with interest payable on the entire top-up amount.

2. Line of Credit – Allows a borrower to withdraw funds in addition to their home loan amount, up to a limit set by their lender. Interest is also payable on these funds. Line of credit loans generally attract a higher interest rate, are often interest-only and must be carefully managed

3. Refinancing – Allows a borrower to move to a different lender and loan product in order to increase their home loan amount. It’s important to shop around as lenders offer different features, fees, interest rates and measure borrowing capacity differently.

Tip of the month – The Importance Of Research

By now, the concept of research has probably been drilled into you. But it’s not over just yet – you also need to ensure adequate research is done for each property that you choose. Just knowing that it’s an up and coming area is not any good if the property is in the only street in the suburb with a ‘bad name’. Know your property – the more you know, the better you can make your decision. Don’t just let a selling agent tell you, do your own bit of research too.

Find out -

• Where are the schools in the area? The hospital and doctors? The Shopping centres? Transport?

• Has the council got any future plans for the area?

• What sort of predicted growth is there for the future?

• What is the vacancy rate for the area?

• Has the property had previous tenants? If so, for how long?

• Is it a type of property that tenants really want?

• What is the street like? Who lives there?

• Is the area currently being developed? Will it be in the future?

• What has been the capital growth in the past one year? 5 years? 10 years?