The property policies both major parties are peddling
Today’s (21 May) the last day for Australians to vote in the federal election. Here, we’ll be recapping the major pr...
It sounds pretty aggressive, 12 property purchases in two and a half years, but it actually hasn’t been for one Sydney-based property investor – and most people, he says, have the capability to do it.
Entrepreneur and property investor, Mitchell Burge, bought his original place of residence when he was just 20 years old and kicked off his investment portfolio when he was 29. Now, less than three years later, he has added 11 more properties to it. Here are his five top tips for doing the same.
1. Make a big effort to pay down your first mortgage
Mr Burge says from the day he got his first mortgage he put everything into it.
“As I earned more money I lived the same life that I have always lived and never splurged out and put everything into that mortgage so we could do this.”
As a result he had accumulated very decent equity to draw down on for that first investment property.
2. Build a team around you – and have some fun
Property investing is a rush, says Mr Burge.
“It is a game that can have bad consequences, but it is the most rewarding thing I have ever done,” he said.
“Buying that first investment house and seeing it wasn’t in the best condition, having my buyer’s agent negotiating it, meeting with my mortgage broker, building a better relationship with my accountant and the whole team pulling together. It’s really rewarding.
“And then to get the tenant in there and actually see the figures and everything come together. At the end the whole thing is paying me, and then at the end of one year the place went up $100,000.”
3. Know the numbers – and believe in them
Mr Burge says being a cautious business person – he also runs an air conditioning business – meant he was sceptical about property investing at first.
“I didn’t believe the figures, didn’t think it was feasible.”
“I wanted to study the numbers, and then I went and saw a property that some associates were closing, and I saw the property and I saw the exact figures and saw that this is actually real.”
4. Plan for capital gain and cash flow balance
“The way we have done it is to have set plans in place, very simple plans,” says Mr Burge.
“Like for example we got a 900-square-metre block in Brisbane with a big house on it. It has a low yield and loses us a bit of money. But that block and its location strategically is going to be worth a lot of money, so it is going to be a money maker over time.
“And then we have got some small units that we have paid as little as just under $200,000 which are so positively geared they generate a good monthly cash flow.”
5. Have a greater goal
For Mr Burge the goal is financial freedom and stability.
“I was brought up quite poor, single mother, public school. I have seen a lot of friends follow the wrong way down the tracks and fall apart and I don’t want my kids to be brought up poor, or their kids.
“My partner and I have got trusts and subsidiaries set up and when we start a family, for every child that we have we are going to create a trust and put a house in that trust, and so they are set for life.
“So this isn’t just us. We are going to set this up for our kids, and their kids.”