If investing in property is on your list of things to do, it’s worth getting serious about planning when you are going to take action. Delay investing in property and you could regret it.
When it comes to making big investments, or any big decisions really, we tend to take our time. Being careful and considered is definitely important, but it’s also vital to be aware of the potential cost of choosing to delay investing property.
We live in a digital age where almost every man, woman and sometimes even child has a mobile phone device or tablet that gives us instant access to an entire world of opinion and information. What a time to be alive! Unfortunately the information superhighway has become saturated with literally millions of articles on every facet of investing. It is almost impossible to distinguish fact from opinion. Pile on top of that the normal demands of life, it’s no wonder many investors fall victim to procrastination and eventually deciding to revisit the idea of buying their next property in a few years.
It’s important to realise though that the cost of delaying your investment by only a few years is significant — and a decision that could cost you tens or even hundreds of thousands of dollars!
If you delay your investing for just two years, the cost is NOT the return from years one and two. It is the return you will miss out on in the latter two years of your investing. We’re talking about the difference between years 24 and 25 in the case of a hypothetical 25 years of ownership.
Consider this example. You decide to purchase a $500,000 property using a 100k deposit with an 80% LVR on purchase. For this example let’s assume that the yearly capital growth of the property is an average of 5% over the life of your investment.
Now looking at the difference in equity between holding the property for either 23 or 25 years – if you were to buy today or delay for two years – this two year delay results in a difference of $157,416. That’s a difference of $78,708 per year! Very significant I’m sure you will agree.
If you have been thinking about investing in property, but are yet to take action, now is as good a time as any to get serious about your wealth creation.
We can help you make informed and wise choices when it comes to your property investment options, so you don’t have to do it alone. Don’t delay investing in property – talk to us about getting started.
Written by Lynton Stevenson, Managing Director, Providence Property Group.