Are you looking to build true long-term wealth? Discover the most effective strategies to make this happen.

Like any other wealth-building endeavour, investing in property can be complex. You have a range of factors to take into account if you want to build a powerful portfolio.

Wealth for Life location
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Moreover, you have a variety of strategies to help you do it. However, not all of them will take you to where you want to be.

In fact, there are only three strategies you can reliably use to create generational wealth. It’s important to note that not all of them will be applicable to your situation. Property investors often have different resources and goals, which they’ll use to determine their strategies.

Before we get into these strategies, think about what you’re trying to achieve. Imagine where you’d like to be a few years from now and picture your definition of wealth.

You’ll see that not everything you’ve learned so far can give you the life you want.

Let’s take a look at the three strategies that do work…

Strategy #1 – The Capital Appreciation Strategy

This is easily the safest property investment strategy out there. When you buy a property in a good location, it will grow in value. It’s just a matter of the rate of growth and time. If you’re patient, you can expect to significantly grow your wealth.

Wealth for Life Capital Appreciation
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Here’s how it works. You buy a property for a certain amount of money and wait for its value to go up. The additional value is your equity, which is also your net worth. There are ways to tap into that equity and turn it into wealth. The most common and simplest is to just sell the property.

Aside from being the easiest strategy, another benefit of capital appreciation is that it boosts your net worth. Many rookies mistakenly measure their net worth in cash flow. But it’s the equity that matters.

People measure their net worth through the value of their shares, properties, and other assets. You need to understand that you’re looking for tangible value instead of cash, which comes and goes.

Of course, you’re not just going to sit around and wait for appreciation. As the value of your property rises, you’ll want to rent it out. The issue is that these properties are usually expensive to buy in the first place. Mortgage rates and interest payments can be high. There can be more expenses than income here, at least at first.

As the founder of Wealth for Life Anthony Peluso explains:

“Your rents won’t cover the expenses or the interest. So you’ve got negative gearing of some sort going on. You need to be in the right position financially to be able to afford something like that.”

This is the biggest downside of the capital appreciation strategy. It’s not for everyone’s budget. You’ll have to invest a lot more in the short term to see the benefits of appreciation. But if you have other sources of income you can tap into, this can be the best wealth-building strategy.

Strategy #2 – The Positive Cash Flow Strategy

As mentioned, capital appreciation is very effective if you can afford it. But what if you can’t? You might want to go down the positive cash flow route.

Wealth for Life positive cash flow
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The concept is very straightforward. You buy a property and rent it out at a rate that covers your expenses and interest rate. As a result, you have a positive cash flow.

The main benefit of this strategy is that it gives you more actual cash you can work with, instead of locking down your wealth in equity. If your goal is to make money you’ll be able to use month over month, you’ll want to go with this strategy.

But in terms of building long-term wealth, this is far from the best choice.

To begin with, properties that can give you positive cash flow usually aren’t in the best locations. As a result, they grow in value relatively slowly. You’ll have to wait for a long time before you accrue any significant equity.

Not only does this slow down the growth of your net worth, it makes it harder to build up your portfolio.

In Peluso’s words:

“If you have to sacrifice capital growth, you might have a portfolio that will get halted very, very quickly unless you have another means to actually come up with a deposit.”

The thing about cash flow is that you’re very likely to spend the extra money as it comes in. It can be tough to save up enough for a deposit on your next investment property. And since the capital growth is slow, it can take way too much time to build a diverse portfolio.

Again, it comes down to your investment goals. If you’re not after net worth, and would rather have more cash on hand, this is the strategy for you.

Strategy #3 – The Instant Income Strategy

As far as risk goes, this strategy takes the crown. But you can expect high levels of reward too, as you can build wealth quicker than with the other two strategies.

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So, how do you create instant income in property?

You flip it at a profit.

Buy a property, renovate it, and sell it for profit. Sounds easy enough, doesn’t it?

Although the overall concept is straightforward, it can be complex in practice.

For example, let’s say you buy a block of land for development. You have lots of details to figure out if you want to get it right. From the legal perspective to the actual development or renovation, you need to get down and do a lot of work.

And you may never know for certain if all of that work will pay off. If you want to build long-lasting wealth through flipping, you need to keep doing it and avoid crushing losses that can wipe you out.

It’s easy to see why this is the riskiest out of the three strategies. But many investors agree that the potential profits make it worth the risk.

Of course, you need money for this. It’s another strategy that requires a hefty outlay. Like the capital appreciation strategy, it’s best-suited for those who can afford it without taking on too many risks.

Choose Wisely

While there is no lack of property investment strategies for building wealth, the three described above are by far the most effective. If you play your cards right, you can make all of your financial dreams come true.

  • Facebook
  • Twitter
  • Google+
  • Pinterest
  • Gmail
  • LinkedIn

Of course, the first step is to choose your strategy with caution. You don’t want to start your journey to wealth on the wrong foot.

In essence, you have to think about your priorities and resources. Do you have enough cash flow to rely on capital appreciation? Or maybe cash flow is exactly why you want to invest in property in the first place…

Start by figuring this out and then choose your strategy wisely. And remember that Wealth for Life can help you achieve your investment goals. Feel free to reach out to us.

Are you looking to build true long-term wealth? Discover the most effective strategies to make this happen.

Like any other wealth-building endeavour, investing in property can be complex. You have a range of factors to take into account if you want to build a powerful portfolio.

Wealth for Life location
  • Facebook
  • Twitter
  • Google+
  • Pinterest
  • Gmail
  • LinkedIn

Moreover, you have a variety of strategies to help you do it. However, not all of them will take you to where you want to be.

In fact, there are only three strategies you can reliably use to create generational wealth. It’s important to note that not all of them will be applicable to your situation. Property investors often have different resources and goals, which they’ll use to determine their strategies.

Before we get into these strategies, think about what you’re trying to achieve. Imagine where you’d like to be a few years from now and picture your definition of wealth.

You’ll see that not everything you’ve learned so far can give you the life you want.

Let’s take a look at the three strategies that do work…

Strategy #1 – The Capital Appreciation Strategy

This is easily the safest property investment strategy out there. When you buy a property in a good location, it will grow in value. It’s just a matter of the rate of growth and time. If you’re patient, you can expect to significantly grow your wealth.

Wealth for Life Capital Appreciation
  • Facebook
  • Twitter
  • Google+
  • Pinterest
  • Gmail
  • LinkedIn

Here’s how it works. You buy a property for a certain amount of money and wait for its value to go up. The additional value is your equity, which is also your net worth. There are ways to tap into that equity and turn it into wealth. The most common and simplest is to just sell the property.

Aside from being the easiest strategy, another benefit of capital appreciation is that it boosts your net worth. Many rookies mistakenly measure their net worth in cash flow. But it’s the equity that matters.

People measure their net worth through the value of their shares, properties, and other assets. You need to understand that you’re looking for tangible value instead of cash, which comes and goes.

Of course, you’re not just going to sit around and wait for appreciation. As the value of your property rises, you’ll want to rent it out. The issue is that these properties are usually expensive to buy in the first place. Mortgage rates and interest payments can be high. There can be more expenses than income here, at least at first.

As the founder of Wealth for Life Anthony Peluso explains:

“Your rents won’t cover the expenses or the interest. So you’ve got negative gearing of some sort going on. You need to be in the right position financially to be able to afford something like that.”

This is the biggest downside of the capital appreciation strategy. It’s not for everyone’s budget. You’ll have to invest a lot more in the short term to see the benefits of appreciation. But if you have other sources of income you can tap into, this can be the best wealth-building strategy.

Strategy #2 – The Positive Cash Flow Strategy

As mentioned, capital appreciation is very effective if you can afford it. But what if you can’t? You might want to go down the positive cash flow route.

Wealth for Life positive cash flow
  • Facebook
  • Twitter
  • Google+
  • Pinterest
  • Gmail
  • LinkedIn

The concept is very straightforward. You buy a property and rent it out at a rate that covers your expenses and interest rate. As a result, you have a positive cash flow.

The main benefit of this strategy is that it gives you more actual cash you can work with, instead of locking down your wealth in equity. If your goal is to make money you’ll be able to use month over month, you’ll want to go with this strategy.

But in terms of building long-term wealth, this is far from the best choice.

To begin with, properties that can give you positive cash flow usually aren’t in the best locations. As a result, they grow in value relatively slowly. You’ll have to wait for a long time before you accrue any significant equity.

Not only does this slow down the growth of your net worth, it makes it harder to build up your portfolio.

In Peluso’s words:

“If you have to sacrifice capital growth, you might have a portfolio that will get halted very, very quickly unless you have another means to actually come up with a deposit.”

The thing about cash flow is that you’re very likely to spend the extra money as it comes in. It can be tough to save up enough for a deposit on your next investment property. And since the capital growth is slow, it can take way too much time to build a diverse portfolio.

Again, it comes down to your investment goals. If you’re not after net worth, and would rather have more cash on hand, this is the strategy for you.

Strategy #3 – The Instant Income Strategy

As far as risk goes, this strategy takes the crown. But you can expect high levels of reward too, as you can build wealth quicker than with the other two strategies.

  • Facebook
  • Twitter
  • Google+
  • Pinterest
  • Gmail
  • LinkedIn

So, how do you create instant income in property?

You flip it at a profit.

Buy a property, renovate it, and sell it for profit. Sounds easy enough, doesn’t it?

Although the overall concept is straightforward, it can be complex in practice.

For example, let’s say you buy a block of land for development. You have lots of details to figure out if you want to get it right. From the legal perspective to the actual development or renovation, you need to get down and do a lot of work.

And you may never know for certain if all of that work will pay off. If you want to build long-lasting wealth through flipping, you need to keep doing it and avoid crushing losses that can wipe you out.

It’s easy to see why this is the riskiest out of the three strategies. But many investors agree that the potential profits make it worth the risk.

Of course, you need money for this. It’s another strategy that requires a hefty outlay. Like the capital appreciation strategy, it’s best-suited for those who can afford it without taking on too many risks.

Choose Wisely

While there is no lack of property investment strategies for building wealth, the three described above are by far the most effective. If you play your cards right, you can make all of your financial dreams come true.

  • Facebook
  • Twitter
  • Google+
  • Pinterest
  • Gmail
  • LinkedIn

Of course, the first step is to choose your strategy with caution. You don’t want to start your journey to wealth on the wrong foot.

In essence, you have to think about your priorities and resources. Do you have enough cash flow to rely on capital appreciation? Or maybe cash flow is exactly why you want to invest in property in the first place…

Start by figuring this out and then choose your strategy wisely. And remember that Wealth for Life can help you achieve your investment goals. Feel free to reach out to us.

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