Читать книгу Buy Now - Lloyd Edge - Страница 13

Fifteen years ago I was a full-time music teacher on an income of less than $70 000, still paying off that one-bedroom unit in Rockdale, and I realised that if I kept doing what I was doing, I was never going to achieve my goal of securing my dream home.

I could see that negative gearing was going to keep me at work forever, because I was subsidising the mortgage through my income and waiting — potentially for decades — for capital growth.

So I looked into ways to create positively geared investments and bought a high-cashflow rental property in a mining town, which lost most of its value and rental income when the resources market bottomed out. I've never made that mistake again!

Now I research the markets for high-growth properties with good rental demand in areas with multiple stable economic drivers. I'll cover this in chapter 10.

When investing in property, I also look for ways I can ‘manufacture equity’ rather than relying solely on the organic growth of the markets. Manufacturing equity might mean anything from a cosmetic to a structural renovation to boost the value and rental yield of a property. We will explore how to create your own equity in chapter 7, and cover this renovation strategy in depth in chapter 8.

While you might be priced out of the markets in the capital cities (we cover reading the markets in chapter 9), there are still many properties available across the country that you can buy, subdivide and then sell off the backyard (known as a battle-axe lot). These properties can offer a great cashflow injection for your portfolio. I did this a few times while building my portfolio.

The investment strategy that really launched my property portfolio like a rocket came through my discovery of the power of building duplexes. When I built my first duplex and subdivided it, I made twice as much in equity as I earned in a whole year from teaching.