5 Multiple Streams of Property Income That Will Make You Rich
Multiple Streams of Property Income
Have you ever wondered how others seem to have it so easy?
Driving top of the range cars, owning several properties, seeming relaxed, confident and happy… and often at such a young age!
Surely it’s time you tried something different? Something which could bring you all the money you could ever reasonably want. Imagine yourself 2-3 years from now….
You no longer work. Most of your time is yours to do with as you please. Whilst you may not be ‘super rich’, you live in your dream home and have a top of the range car (or two). You take holidays when you wish and help out your friends and family without a second thought. You are totally free from the 9-5 grind.
No boss, no bad debts, no mediocre lifestyle. You look forward to every day with confidence – knowing that your asset base is growing every year and will provide a superb pension and huge cash lump sum when you decide to retire.
If you are poorer than you would like to be, over-worked and under-appreciated, then here’s the good news… There IS a way out!
Thousands of ordinary Brits are getting quietly rich from their property portfolios,
and many of these people discovered a closely guarded secret about property…
Perhaps like you, they thought that only other people get rich through property. ‘Other’ people with fat deposits, impeccable credit ratings and lots of insider contacts. As they found out, they couldn’t have been more wrong! So, what’s their secret?
They all discovered that serious money could be made by normal people who start out with no money for deposits (some even with a lousy financial track record), no possibility of borrowing huge sums from banks or building societies and no experience of property investment.
And here’s the amazing news… YOU can join them right now. But only if you’re willing to discover the simple, proven steps to property wealth using other people’s money.
Let’s face it, it’s easy to make a fortune in property if you have a spare million or two to get started.
Most people don’t have that, but here’s something you may not be aware of… There’s no shortage of money for the right deals!
What is it that makes someone successful with rental property investment?
Profit from property in ways you never realised existed
When you think of how you profit from property investment, you probably think of capital growth and rental income. But there are other ways that investors profit from residential investment property. Less obvious ways, but equally as important.
Each of these profit streams is passive. You don’t have to spend hours per day, every day of the week, slogging away to make this money. It could start flowing from the day you first invest.
Monthly Rental Income
If you’ve invested with the numbers, your buy-to-let property should produce positive cash flow which, let’s face it, is the primary goal of many property investors.
If passive income is your main aim, do your research and find the best places to invest in property for cash flow. Pay attention to the expenses of owning and maintaining your property. The rental income must be more than these costs – mortgage payments, investment property management, maintenance and repairs, and so on.
Positive cash flow is passive income. If you build a portfolio of properties which each produce positive cash flow, you could earn enough to get out of the rat race.
Positive cash flow isn’t the only way to profit from property. Many investors buy negative cash flow properties and earn from capital growth.
It is the second of the obvious profit streams from property investment. In the UK, the average house price has doubled every eight to ten years.
When the price of your investment property rises, it’s like having a bank account that pays an incredible interest rate. To see the benefit of this, you will have to withdraw the profits. You can do this by re-mortgaging your property to release equity, or by selling it.
Even if your property produces negative cash flow, the capital growth you make could outstrip the expense. If you invest in a property with a negative cash flow of £100 or £200, you are effectively subsidising the property for its value appreciation over a period. While £200 may sound like a lot of money to find each month, over the last 20 years, it would have bought an average of £625 per month in capital gain.
Capital growth is a very powerful profit stream and one that should increase as your portfolio grows. The secret to reaping maximum reward from this capital growth is leveraging your cash to invest in property.
Profit Produced by Leveraging to Invest
When you buy a property using a buy-to-let mortgage, you are using other people’s money to make a profit. Your tenants are paying the mortgage, while you are reaping the benefit of either positive cash flow or capital appreciation. Possibly both.
You might decide to do one of the several things with your positive cash flow. For example, you could pay down the capital owed on your mortgage. Once it has been paid off, you own the property outright. In effect, your tenants just bought it for you!
As the value of your property increases so does your net worth in the form of equity in your property. You could release this equity as a deposit on a second investment property. Now you have doubled your profit potential – all by using other people’s money.
Every penny you make using other people’s money is a penny you would not have made otherwise. And when it comes to property investment, we’re not talking pennies – using other people’s money to invest could make you tens of thousands of pounds in profit (and more).
Protection Against Inflation
As time passes, the money in your bank account loses value. It will buy less in five years than it does today. That is the effect of inflation. However, when you invest your money in a property, you protect yourself against inflation. Here’s how this works:
- Let’s say you buy a property valued at £200,000.
- You finance the deal with £50,000 of your own money and a buy-to-let interest-only mortgage of £150,000 fixed at 4.5%.
- Ten years from now, you are still paying the same mortgage
- But the rent you are charging has increased with inflation.
- You are netting more rental income.
Your income naturally rises, while the mortgage remains the same. You’ve inflation-proofed your passive income.
A Profitable Legacy for Generations
The final profit stream is one you won’t see, but one that could change the lives of your loved ones in the same way property investment changed your life. Perhaps even more so.
Property is a tangible asset. It’s real. You can touch it. If you structure your financial affairs correctly, when you die you could leave a life-changing property portfolio to your loved ones, with all inheritance tax paid by life insurance policies.
Imagine being able to give your kids the benefit of multiple streams of profit and monthly income. Your legacy will live for generations, as your children pass your property portfolio to your grandchildren, and so on. All inflation-proofed income. For decades upon decades after you die.
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