What are the pros and cons of investing in a commercial property?
What are the pros and cons of investing in a commercial property? Read on to learn more. ...
Like many who have found success in the business of creating wealth through property, Victor Kumar and his wife paved the way towards achieving their financial goals by sticking to the basics of property investment—from education, good location, and the value of maintaining cash flow.
They started their property investment journey by investing in properties in Liverpool—areas which are near their principal place of residence.and
While many investors would say that this is not always a good strategy, the couple found themselves reaping good returns out of their investments because of the good location of the property.
Victor shared: “With our first three properties… we didn’t know what we were doing. We bumbled our way through it. Like any other investor, we invested close to home. We just happened to be in a good area. I got lucky in the initial stages then I educated myself.”
They went on to educating themselves through different seminars, books, podcasts, and other resources, and they found that all it takes to succeed in this venture is to keep the fundamentals in mind.
“It all comes back to basic fundamentals. All the seminars, all the books teach the same fundamentals, they’re all just dressed up differently… That’s what we did—we got to the fundamentals of it, and the fundamentals are very simple,” according to Victor.
Ever since finding out that the areas surrounding their place of residence are good property markets, the couple decided to find a “pattern” to determine the characteristics of a good investment property.
One of their very particular criteria is the distance of a property to a central business district—they try to stay away from areas that are more than an hour away by car.
“We try and stay away from regional areas… from mining towns or areas that have got only one economical driver… I always stay away from [the] inner city, and in terms of CBD… I invest within an hour’s car travel distance from there, that’s my radius. Then, within that, I look at sub-CBDs… and I invest within 10 minutes of those [sub]-CBDs,” Victor explained.
“We’re looking for the same characteristics [of our first few properties]—the demographic changes, the cafe culture opening up in that area, and all that sort of stuff.”
Additionally, the couple is always looking to invest in cheap but good quality properties in prime locations as opposed to grand real estates that will be hard to get tenanted.
Victor said: “You look at comparables of what’s brand new selling in that area, and within kilometers of that brand new developments, you buy older comparable properties with a differential of at least $100,000 between old and new.”
His advice to budding property investors: Be familiar with the fundamentals of property investment and you’re good to go.
“You can’t go wrong [with the fundamentals as a guideline]. It still holds true today,” he said.
“Think things through first. Get more focused as to what you’re trying to achieve rather than [thinking] ‘I want to buy 10 properties [or] 50 properties.’ Don’t focus on the number. Focus on the outcome and focus on the end cash flow. Give yourself a timeframe.”
Tune in to Victor Kumar’s episode on The Smart Property Investment Show find out how hard work, perseverance, education, and a dogged never-give-up attitude set Victor Kumar on a path to success.
Property refers to either a tangible or intangible item that an individual or business has legal rights or ownership of, such as houses, cars, stocks or bond certificates.