Hi all
For those who don't get the NZ Herald, here's a very inspirational piece:
Congratulations!! Is it someone from this forum?
For those who don't get the NZ Herald, here's a very inspirational piece:
I am 46, and very much the "average" person, who worked many years at a job where I earned about $40,000 a year.
About 10 years ago, I did extensive research on residential property investment in NZ that was self-conducted (I did not take a seminar).
What impressed me was that people who owned 30-plus residential properties often had a story about a property that made them money, with 100 per cent finance, from the first day of ownership.
I decided to build a property portfolio worth at least $2 million over the next six years using these three simple rules:
1) The anticipated rent must exceed what the principal and interest payments would be with 100 per cent finance, plus related expenses. Put another way, a property would have to generate a net profit.
2) If I cannot imagine the property being there in 50 years, I walk away.
I never get builder's reports, because I would never consider buying a property that made me suspicious enough to ask for one.
3) Always remember, "capital gain is promised to no one". Any property I buy has the potential of some day being owned purely by management work, without any of my own capital being put into it.
So, how did I do?
Well, I settled on my first property in September 1997. My starting financial base was about $100,000 in equity in the house we lived in, and about $20,000 in savings.
It took over a year to find and buy property number two, a further eight months to buy property number three, etc, eventually getting up to property number 18 in June of this year.
I have not compromised my three rules throughout the process, and established borrowing power purely through the equity that was not promised, but nonetheless occurred.
Because of Rule 2, I have security to a degree, in knowing that I have substantially good property. If you want to work out my rate of return, please use the $20,000 figure, as that is all I have invested of my own money.
My net worth, even using very conservative and outdated Government valuation figures for each of the properties balanced against what I owe, is currently $1.2 million dollars.
My lifestyle has not changed one bit. I still live in the same house I started in, and in all ways I appear to be a person that earns about $40,000 a year.
I manage all my properties myself (because I love them), and my goal is to pay for the whole lot before I retire.
About 10 years ago, I did extensive research on residential property investment in NZ that was self-conducted (I did not take a seminar).
What impressed me was that people who owned 30-plus residential properties often had a story about a property that made them money, with 100 per cent finance, from the first day of ownership.
I decided to build a property portfolio worth at least $2 million over the next six years using these three simple rules:
1) The anticipated rent must exceed what the principal and interest payments would be with 100 per cent finance, plus related expenses. Put another way, a property would have to generate a net profit.
2) If I cannot imagine the property being there in 50 years, I walk away.
I never get builder's reports, because I would never consider buying a property that made me suspicious enough to ask for one.
3) Always remember, "capital gain is promised to no one". Any property I buy has the potential of some day being owned purely by management work, without any of my own capital being put into it.
So, how did I do?
Well, I settled on my first property in September 1997. My starting financial base was about $100,000 in equity in the house we lived in, and about $20,000 in savings.
It took over a year to find and buy property number two, a further eight months to buy property number three, etc, eventually getting up to property number 18 in June of this year.
I have not compromised my three rules throughout the process, and established borrowing power purely through the equity that was not promised, but nonetheless occurred.
Because of Rule 2, I have security to a degree, in knowing that I have substantially good property. If you want to work out my rate of return, please use the $20,000 figure, as that is all I have invested of my own money.
My net worth, even using very conservative and outdated Government valuation figures for each of the properties balanced against what I owe, is currently $1.2 million dollars.
My lifestyle has not changed one bit. I still live in the same house I started in, and in all ways I appear to be a person that earns about $40,000 a year.
I manage all my properties myself (because I love them), and my goal is to pay for the whole lot before I retire.
Congratulations!! Is it someone from this forum?
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