Does Property Build Wealth?

Hey I consider myself one of the punters........I like punting....

 

I'm just a mug

 

Looks much cuter as a blonde

 

Hey that makes two of us perhaps ..we should start a Mugs club!

 

MONA Lisa burlesque

 

Sacre Bleu..off to the Guilitoine for you madamoseille....n'est pas?

 

Resi property is a mugs game, commercial is where the real investing happens.
I got to get myself into the real game sooner or later to make proper returns.

 

Property doesn't build massive wealth.

The investor does. And that's where all the problems start.

 

Yes..which is why I like being a mug.

 

So, only the number of properties being talked here. What about the value?

Doesn't that matter?
I am too obsessed about property. I dont find much time due to hectic job and family needs but all my spare time (if any) is devoted to reading.

I know property is a long term game and one needs to be patient. But, recently, a fri3nd quoted: "lets say i bought 3 properties in next 2 years, attain 100k in 3 subsequent years. And then buy 2 more with that. So i have 5 properties in 5 years but LVR still at 80%. Where is the wealth? When you can use that wealth?"

The fact that my initial investment has led me to buy two properties is wealth for me. It will grow over time, I know that. The fact that he is not able to use that wealth in lavish spending is not wealth for him. Especially waiting for 5 - 8 years to see something.

I, however, could not justify my answer. Where am i wrong or Am I wrong in explaining?

Regards

 

That's 1 strategy of holding property long term mate. It doesn't necessarily have to be a very long term game in order to be a great vehicle to FF.

And yes your right. Number of props for the most part is irrelevant. Total value of props and locations is far more relevant imo.

 

It could theoretically be true that $80k is the average salary and that only 21% of taxpayers earn over $80k.
Don't confuse averages and medians.

But yes, we (those that earn a reasonable salary) are very fortunate. I did make it into that 0.068% before making over $80k per year though.

 

We are going to have to wait until mid 2017 for this year's Census data but I will watch with interest the new stats for PI ownership..

 

j.o.b......just over broke

 

Must have the wrong job @MTR

 

Let me try.
I myself have a lot of cash stashed into an offset and other accounts.
This allows me to live my life (still below my means: spend less than I earn) but I still enjoy my money and don't ever bother sweating the small stuff.
Went on a $10k USA trip last year and bought a new sports car as well. I'm still ahead and property investing has helped me reach this point where I'm quite flexible have a decent amount to fall back onto. I'll never need to worry about credit card debt or when/how to pay bills.

All things that most on this forum can easily take for granted, yet something the common Australian struggles with on a day to day basis.

That is one of the benefits of becoming a property investor is about.

 

Yeah I agree. A lot of people structure themselves up for tax effectiveness.

 

I think that for the average aussie household, saving up enough money for deposits isn't very feasible. You can write it off as "they are wasting their money" or whatever, but simple fact is (and if you really want, I will dig up data on this), wages haven't kept up with cost of living.

Also a lot of people aren't so comfortable with taking on a tonne of debt, personally I see it as a necessary evil.

I also don't see a need to acquire 6 properties, I may for ***** and giggles (within a few months I will be halfway there + I've got potentially a quarter century or more to keep buying), but its not remotely necessary for my current or desired lifestyle. Total # of properties also seems like such an odd metric to me. I'm sure there are people on here (e.g. that deltaberry guy from somersoft, can't remember his new username) who have individual IP's worth more than my current/soon to be portfolio. I think most people would rather quality than being a slumlord with all the effort that entails.

PPOR paid off + 1x IP + $700k in diversified high yield ETFs (probably all US/world, 2x aus prop would be enough local exposure) would have me very comfortably financially independent with wiggle room for dealing with disasters e.g. downsize PPOR, cut costs for a while, geographic arbitrage by living in a low COL country for a bit, etc.

 

I suspect these statistics are based on properties registered to individuals and not to companies
Every single investor i know (with more than 6 properties) have them registered under companies
I know for a fact properties have made me well off .

 

I agree the yardstick of number of properties is always odd as it is the net income that is the best guide