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property mentor, how to invest in property with little money
Why invest in property
Robert Kiyosaki (Author of Rich Dad, Poor Dad) is one of the main influences in getting property investors started. This is because he draws a differentiation between owning a property, which we usually consider to be an asset, and explains why owning a property that you live in is actually a liability – why? Because you are responsible for paying the mortgage and the bills, and even if the mortgage has been paid off then you are still responsible for paying the bills and upkeep of the property.
When we buy investment property with the intention of renting the rooms or the whole house then the mortgage debt is paid by the rental income and the bills are covered too. This is what we call Good Debt.
The beauty of investing in property over any other investment is that most of us have at one time or another lived in a house that is owned by our parents, or rented a property or even a room in a house. Many people have done some DIY, whether it’s hanging up a picture, or painting a room, so working with property seems quite normal, and the fact that you can touch the property and see what the potential investment looks like feels more comfortable than other investments you can’t see such as Stocks, Shares, Silver, Gold or wine.
If buying a house and not being able to pay the rent is something that causes you concern then you might consider purchasing a rental property and living in one of the rooms, or even taking in a lodger into one of the rooms of your own house to assist in paying the mortgage. You can currently earn about £4,000 per annum through charging a lodger before you have to pay tax on these earnings.
Property generally doubles in price over 7 to 10 years. You could argue that because of the credit crisis this might take a little bit longer, but the principle is there. In a few years’ time our children will be able to put on a credit card the amount we paid for our first property – scary isn’t it! So if you can find a way to invest in property now then you will add to your future earnings in a way that you can’t put a figure on, because the total amount of future earnings is so great, even if you have to wait for it.
property mentor, how to invest in property with little money
Why invest in property
Robert Kiyosaki (Author of Rich Dad, Poor Dad) is one of the main influences in getting property investors started. This is because he draws a differentiation between owning a property, which we usually consider to be an asset, and explains why owning a property that you live in is actually a liability – why? Because you are responsible for paying the mortgage and the bills, and even if the mortgage has been paid off then you are still responsible for paying the bills and upkeep of the property.
When we buy investment property with the intention of renting the rooms or the whole house then the mortgage debt is paid by the rental income and the bills are covered too. This is what we call Good Debt.
The beauty of investing in property over any other investment is that most of us have at one time or another lived in a house that is owned by our parents, or rented a property or even a room in a house. Many people have done some DIY, whether it’s hanging up a picture, or painting a room, so working with property seems quite normal, and the fact that you can touch the property and see what the potential investment looks like feels more comfortable than other investments you can’t see such as Stocks, Shares, Silver, Gold or wine.
If buying a house and not being able to pay the rent is something that causes you concern then you might consider purchasing a rental property and living in one of the rooms, or even taking in a lodger into one of the rooms of your own house to assist in paying the mortgage. You can currently earn about £4,000 per annum through charging a lodger before you have to pay tax on these earnings.
Property generally doubles in price over 7 to 10 years. You could argue that because of the credit crisis this might take a little bit longer, but the principle is there. In a few years’ time our children will be able to put on a credit card the amount we paid for our first property – scary isn’t it! So if you can find a way to invest in property now then you will add to your future earnings in a way that you can’t put a figure on, because the total amount of future earnings is so great, even if you have to wait for it.
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