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ROT not ROI
Assuming the same market: If I had a property that returned $50,000 and one that returned $100,000, which one would you pick? Pretty simple isn’t it?
Now most clients come to me when it’s too late ie: Have “Hit the Wall.”
My longest standing client has been with me for 4.5 years, started with a loan from Dad of $20,000 and will earn $380,000 this year in equity with a positive cashflow of $65,000 p/yr (pre tax). I’m not telling you this to impress you, we just ask ourselves a very logical question which most (Property) investors never do……I ask every one of my clients when they come to see me for the first time with their current portfolios “What the hell was the plan to get your money back???” and 9 times out of 10 the answer is, “The market would go up by x%, depreciation, it’s in a GROWTH area, etc, etc, etc…….”. Then there’s the retirement timeline, “About 8-10 years away”…For the goal setters out there, does this sound MEASURABLE to you???
Investors do this because it’s the “Safest” way to invest in property….”It’s a long term strategy”…..They are right about the returns and the long term approach and done ALL the research and got ALL the facts and figures but have forgotten the ALL important factor which can kill any of those numbers, the “TIME” it takes to realise this.
Now let me ask you the same question as I did at the top but NOW the question goes:
Assuming the same market: If I had a property that returned $50,000 in 6 months and one that returned $100,000 in 1.5 yrs which one would you pick?
Now let’s revisit this SAFE option of most investors. Safety really comes from certainty doesn’t it? Yes you can be more CERTAIN investing in a market that everyone else is, and you’ve heard others get results out of, but as investors “If Uncle Bob is telling you to buy there, it’s probably too late” and therefore contradicts the LONG TERM factor of this argument.
Let’s introduce a strategy where we can have certainty over TIME to my question:
Assuming the same market: If I had a property that returned $50,000 in 6 months by making some planned changes to it which have a fixed cash outlay of $x because you’ve already got fixed quotes for them and you’ve got recent comparable sales data to show that “TODAYS” market will pay $50,000 for and one that returned $100,000 in 1.5 yrs because history tells us that it should and there’s a lot of development going on there…..which has more certainty?
Which is the safer option now???
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