Why Property Investing Sucks for Becoming Rich??

I love real estate - and for me it's all about value adding. Just like any product, in any business, the dollars are in adding to the value at minimum cost, and then selling at higher profit margins.

If you do that with your PPOR every 2-3 years - buy the worst house in a great location, renovate, sell - or buy and subdivide.

Granted - there are a few, in hindsight, I wish I hadn't sold but all in all we've done "not to shabby" and had a lot of fun along the way.

 

I think property investment is a excellent way of making someone rich. By being rich I mean the top 5 percent of the population with a few million of assets. if you want to be filthy rich say 0.01% than thats a different story. I have started businesses in the past and none seem to last the distances although i was working 18 hours daily not to mention the amount of money invested. Some stats somewhere has mentioned that 90% of new businesses closes in 5 years so definitely a very small chance to be rich let alone filthy rich by just running a business.

 

One of the worst moves you can make as a young person in a depressed or static market is buy property.and be tied to a big mortgage. Not much value for the next five or six years. Start a business .

 

I'd like to try this but I think the stress would honestly kill me. Unless I could hire a manager or a buyers agent to hold my hand through the process (ordeal).

Perhaps even just buying then splitting and subdividing and selling the back off could be an option.

 

At this stage I'd be happy if I end up with 3 unencumbered ip's and 1 fully paid off ppor

 

I actually wouldn't mind paying someone to do it for me if it means I can get ahead and I don't think there's anything wrong

I would have to be switched on to and not just rely on the manager I've employed to do the right thing. Lots of research and dd would need to be done

 

You don't have to buy real estate in a depressed market. There are thousands of markets/opportunities to choose from.

Re starting a business, most businesses take a number of years before they become really profitable and that's assuming they haven't gone bankrupt in the mean time. Nothing wrong with starting a business but just keep in mind that if your successful, the 4 businesses next to you will be bankrupt in the next 5 years .

 

Few better investments than real estate in a ascending market.Agree. Tax free capital gains
My son has just decided to sell his first unit.I have seen the pressure it put on him and the market has slowed. He will be far happier.

 

Totally agree and I am a big fan of one owning their own business, especially for cashflow purposes.

As I have posted a number of times on PC, we owned 4 x businesses in our working life.

The last one (a software, training and consulting business) we started from scratch in 1990 and sold it 20 years later in 2010. It was only the last 3 to 5 years of ownership that we made serious money; it took at least 15 years to get to that stage.

In 2003/04, we even made a loss; imagine working your butt of for a year (12 hour/day, 6 to 7 days/week)and your reward was handing the world back $17,000 (in our case) for the “privilege”.

To me, owning a business is a lot like property investment. Both consume a lot of your money, both consume a lot of your time, both involve a lot of stress (financial, relationships, health, ...), both involve risks, both involve one making mistakes, ... BUT if one takes a long-term view, works hard, make more right major decisions than wrong ones, has a little bit of luck, ..., the fruit from both is very delicious.

Postscript: the two people who bought us out went belly-up two and a half years later (rumoured to owe their creditors including their bank $12M). But, the same thing can happen with investment property - ask all those who bought in mining towns a few years back.

Get it wrong and the **** can hit the fan in a big way.

 

I think if you asked most people when they start the workforce straight out of school; if they would be happy to retire in 20 years; most would be happy with that result?
A lot of people are just happy to pay their home loan off earlier too.
But I get what you mean; if you are comparing the various options of how to get rich and retire early....a lot of people's viewpoints are related directly to their current situation; to some $1000 is an enormous amount of money; while to others it is almost money spilt at the bar over a year.

 

Well said. Nothing left to add. Well done on your businesses mate.

 

Bump
Blast from the past…..

Who said property wont make you rich….. and you wont need 20 years

 

The secret to being rich is gambling on crypto during a pandemic.

 

Let me put this on the to do list for 2022