You can easily save thousands of dollars over the course of a home loan simply by getting a lower interest rate, because that's a compounded saving every year. But you can go further, and make a fortune in real estate, even with an average income. It's all about teaming up with a group of investors, because that's where you get the power to do great things.
This article will give you the information you need to save a lot of money on what will probably be the largest expense you have to pay in your whole life, your home loan.
It's specifically aimed at Australians, but the basic concepts discussed will work for anyone. The first thing you need to work out is, do you really want to buy a home that you will live in yourself, or is it better to buy an investment property?
You have to do research, and compare the figures of how much you would get by living at home, or in a share house, while getting a tenant to pay the loan off for you, and how much it takes to pay it off enough and refinance so that the loan is positively geared...
Do you want to team up with investment partners, should you buy a cheap, or expensive property? At the very least, you need to talk to a home loan broker to get the loan with the best combination of interest rates, fees and charges, if not a financial advisor, specializing in real estate.
Making A Lot Of Money From Real Estate
I probably lost half of the people reading this before, when I started talking about buying a house and renting it out to someone else. There are reasons why it's better to make your first house purchase an investment property, especially if you have really good income, or can team up with investing partners.
This is the basic idea, you save up a large deposit, or have a large income that can quickly come up with a quarter of the cost of the property. Once you've paid it down by a fair bit, you can refinance the loan so that it's positively geared, which means that the tenant pays more than the home loan repayments. The goal is buying a high end investment property which is close to being positively geared already.
It should be built real solid, perhaps out of brick, so it can't get damaged too much. You and pehaps your investment partners should put all your money into making it positively geared as soon as possible, remembering to account for taxes, insurance, tenants insurance, rates, and maintenance.
Once it reaches that point that the tenant is paying more than the loan repayments, and they are signed up to a lease, you're set, and the property is giving you income, which can help in getting you another loan approved, so you can do it again.
Duplicating is the goal, and you want to do it as quickly as possible, while also accounting for anything that can go wrong. You can get tenant's insurance that protects you in the case of the tenant moving out.
It's probably worth making it as safe as possible, although you will make more if you take more of a risk.
You shouldn't just take my advice, it's important to seek a second and even third or fourth opinion from experts who are officially qualified to give advice, because they have the right credentials.