Make Millions with Boring Real Estate

some people find real estate boring but boring real estate makes you money and so I guess we should kick off with Why Real Estate might be boring for some people I don't want to name any names but I know some friends and family who think my job as a buyer's agent and what we do here at purpose property is not very exciting they're not really invigorated or excited by buying real estate they think it's boring and cumbersome and it is a lot of work now some of it really is now some of the paperwork dealing with Brokers chatting with buyer's agents dealing with banks accountants lawyers the list goes on there's a lot of professionals you need to get a real estate transaction to go ahead so before we get any further I just wanted to let you guys know that we're having a sale of my invest with purpose real estate course for the next 20 people you can get 20 off so for less than 400 you can learn the end to end about real estate investing head over to purpose.com and click on course to check it out today so how can you get cited by property investing and I think the key here is understanding what boring real estate can do for you it feels like an American campaign what boring real estate can do for you so we're going to break down what boring real estate can do the first thing is is it can generate rental income now for a lot of investors at this point in time the rental income is not going to cover the debt and the additional expenses on a property meaning that most properties are likely to be neutral or negatively geared at this point in time but think about it this way someone is living in that property and paying the bulk of expenses for you to control that asset and as you pay down the debt or the asset value and the rental increases grow that's where you might see increased cash flow and start building your passive income the next really exciting point that should turn you from being a board real estate investor into someone that's more excited about this borrowing real estate is that it's going to appreciate in value over time there's been talks of people on YouTube Martin North's a good example and lots of other economists and property commentators talking that the property Market is going to crash I still recall covered I still recall 2011 I still recall the global financial crisis when I was actually in high school and the world was caving in property prices were expected to implode 30 40 50 falls but one of the exciting things about boring real estate is that traditionally it grows slowly over a long period of time and this is where Capital Growth or Market appreciation can do a lot of the work for you if you can imagine that you're buying a 500 000 asset and it goes up 10 a year there's fifty thousand dollars or if it goes up five percent a year there's twenty five thousand dollars but then it's going to Compound on that appreciation year on year and that's where you're getting compound growth on the growth you've already had now this leans into the tax advantages so we've talked about rental income and we've talked about Capital Growth now you're generally going to be taxed on your rental income but if you're neutral or negatively geared you are going to be able to get some tax benefits depending on the structures you've bought that property in and reduce your tax income as an individual by using negative gearing to your advantage the other big tax benefit is you're not going to pay tax on appreciation only when you have a capital gains tax event so I sit down and chat with people every day of the week we do these free strategy sessions and if you're interested in having a chat with myself and looking to buy a property in southeast Queensland you can head over to purposeproperty.com to book in a free strategy session with myself now in those sessions we talk about the benefits of buying an investment or buying your own home and I chat with a lot of potential investors or potential first home buyers trying to weigh up and make the decision on paper generally buying the investment is going to leave you better off financially the reason being is these tax benefits can really shift and push you into a more beneficial position than buying your own home depending on the situation this is also known as rent vesting so in this scenario yes you have to pay tax on the income from that property but you're able able to claim depreciation the interest payments the property management fees the insurance all of the expenses associated with you generating that income from that property can offset the rental income now if you're able to rent in an apartment say a one or two bed apartment here in Brisbane for around five hundred dollars per week are you able to buy an investment property that runs for say six or six hundred fifty dollars per week and claim all the tax benefits that's where generally you might be better off buying the investment property and building your asset base so I hope you're getting excited about this boring real estate because there's a few more points to close out on this leads me into the power of Leverage although you might be bored by the thought of real estate investing one of the things that real estate gives you is access to leverage or other people's money and all this means is you can go to your bank or your broker get access to other people's money and control a much larger asset base in our example we might have around three million dollars worth of debt and say two million dollars worth of equity for easy numbers this means we're using sixty percent of other people's money to control a five million dollar asset base and when you get growth on that asset base that's where the numbers can really change your life so if we get 10 growth on a five million asset base that means we could make five hundred thousand dollars worth of equity in a year or two assuming that we had 10 growth obviously the inverse is true so you need to be wary of the risks of using leverage and how they can actually maximize your gains but also maximize your potential losses and that's why property is that long-term boring game when looking to buy property for the next 7 10 15 years plus and you're looking for assets that cash flow reasonably well based on your situation so using the power of Leverage means you can buy those boring properties in a major regional or a major Metro location and hold those assets for the long term and see the growth year on year now of course the growth in property is not a linear line it's up and down but General really it has a long upward Trend so be aware that the Market's going to have Peaks and troughs year to year and the property Market could go up 10 it could stay stagnant or could go down 10 in any given year but be aware that the long-term trajectory of property is on an upward Trend around say that five to eight percent Mark now another great point about boring real estate is the magic of diversification we live in a enormous country here in Australia pertz yonks away ages away but the wa Market has been quite hot the last six to 12 months we've got Adelaide we've got Sydney we've got Melbourne we've got Tasmania Brisbane obviously I'm very bullish on and so you can look at the major markets you can also look at the major regional locations and see what opportunities are out there as well now I might be a Southeast Queensland specialist in particular Brisbane and the surrounding local government areas but for yourself you might want to buy an investment or your own home in southeast Queensland and then diversify across Australia and using boring real estate to do that at different price points can give you the value of diversification this means you can spread your risk across multiple States and also be quite clever in your land tax and asset building phase for example with myself and Emily we've looked to build our property portfolio in southeast Queensland I'm very bullish on the prison Market in the next 10 years and I think Southeast Queensland has a lot of potential growth in it one because of the lower median price points relative to Sydney and Melbourne two because of the major infrastructure projects that are coming into Southeast Queensland and number three is the higher incomes and jobs that people have in southeast Queensland being able to pay more for property over time so based on that Emily and I built a portfolio around the three to three and a half million dollar Mark here in southeast Queensland we then look to diversify and bought a property in a unit Block in New South Wales now that means we can spread our risk and we can also make sure we minimize our land tax legally of course and so you might want to look at boring real estate Investments between 400k to a million dollars to build your asset base slowly over time so if you're bored about investing in real estate or you're motivated by watching these videos and you know your partner or someone that's a friend or family member is bored by investing in real estate maybe share this with them to get them more excited about buying real estate Investments I think there's so many benefits of course there are some negatives and potential downsides but overall I think there are so many benefits from investing in property and taking a long-term perspective for me it's about creating the choices at the end of the portfolio if property didn't do this for me and there were other asset classes that gave me choices in life I would probably be talking about them but for me real estate is where I've been able to create Financial Freedom and where most millionaires are created so if you're bored by real estate investing then use board real estate Investments to build your property portfolio at the end of the day as Real Estate Investors we're looking to take calculated and educated risk to build your property portfolio and I've done that through boring real estate and we've helped lots of clients do that through buying boring real estate deals that can help them build their asset base and create value over time now if you're interested in seeing some boring real estate deals which I think are probably quite exciting then click this playlist over here where I break down some of our recent client deals you'll see properties as low as 450 000 all the way up to around the 1.5 million dollar Mark of people purchasing here in southeast Queensland whether they're an owner occupier or an investor so thanks for sticking around and I'll see you in the next one peace [Music] thank you

Channel: Luke Wiles

Views: 1,943

Keywords: real estate, property, investing, Luke Wiles, Purpose Property, Buyers agent, Brisbane

Id: Wj5pollCKjo

Length: 9min 57sec (597 seconds)

Published: Fri Jun 23 2023