Why Become A Property Investor?

Why Become a Property InvestorThis was a question I and countless others have asked themselves before deciding that there are few other businesses like it.

Being part of the rat race isn’t fun, I was watching Bee Movie with my daughter today, this movie sums up perfectly why we should all strive for financial freedom. During graduation the young bees are taken for a quick tour of the hive, the place where they will be spending the rest of their lives.

The guide, Trudy, says,”you’ll be happy to know that bees as a species haven’t had a day off in 27 billion years. Whew!”. A concerned Barry B. Benson asks “So you’ll just work us to death?” to which Trudy says “We’ll sure try” with a grin and a blank expression.

When you decide to become a property investor, you are in a sense leaving the hive.

Property investing is like a drug, once hooked few people want to get out of the business because it can be so rewarding.

In what other business can you earn a passive income using the bank’s money? Or make an investment that will begin paying for itself from the time you invest?

This is what becoming a property investor is all about, it will not only give you the freedom to choose your own path in life, it will also provide you with an income that just keeps growing over time no matter what the economy is doing.

When you’re part of the rat race, it can often be the case that you will be watching the clock. Believe me, I’ve been there when it’s 4 o’clock and you’re tapping the pen on the desk or surfing the Internet thinking it feels more like 6pm. The problem is your boss is unlikely to share that feeling.

In a 9 to 5 job we are under pressure to perform and abide by the rules and regulations of the company, step out of line and you will lose your job and your income. Toe the line and you sentence yourself to a lifetime of work, where free time usually only comes at the weekend and the holidays – if you are one of the lucky ones.

Lose a job and this can be catastrophic and in some cases it can take years to recover from the financial loss particularly in a competitive jobs market.

Property investing on the other hand doesn’t depend on you being there, other than to sign the documents and keep up the mortgage payments. You may need to inspect your properties now and again, however there are specialist agents to do that for you.

It is worth remembering that building a property portfolio is a serious business, you need to be sure of your goals and objectives from the outset. Is your goal financial freedom or a nest egg for retirement?

Most professional investors starting out will look to make a living from property. To do this will require the patience to invest in the right locations at the right time. Properties in good locations will provide the rental income to cover the costs of ownership and the mortgage.

The capital growth will then create the income necessary to begin making a passive income from property as in this example using a conservative estimate of 5% (average) annual growth:

The smart investor will invest in property that pays for itself and puts cash into his pocket. I personally do not invest in any property unless, after all the costs are paid, I can safely expect a net yield of at least 5% per annum.

Capital growth for me is a bonus I can enjoy on top of this – and over the long term I usually get a very big bonus.

Let us assume for example I have a passive income earnings target of £30,000 per year. To achieve this I will need to build a £600,000 property portfolio that provides me with a minimum 5% net yield per annum. So I now have five properties costing just £120,000 each.

By sticking to my tried and trusted method of always investing in property that pays for itself you will put the cash into your pocket that will get you where you want to go.

I can also tell you that with proper advice, building your very own £600,000 property portfolio is not that difficult. When you consider that the average buy-to-let investor owns five properties this projection is conservative. So if you really want to leave the hive, why not become a property investor?

Are you planning to become a property investor this year? If so what are your reasons for doing so. Please leave your comments below.

Kind Regards

Brett Tudor
Property Expert