The Property Investment Timeline Explained

https://www.youtube.com/watch?v=1QuP3VNg9yE Today I want to share with you a really powerful concept called the Property Investment Timeline. Through this time line you'll be able to map out and see exactly how property investing can change your life in the long term, but also how you can gain massive choices and freedom in your life in as little as 2 years. Book a Free Property Strategy Session 1:08 - How Most People Invest In Property3:24 - The '2 Year Strategy' Explained5:43 - Stage 1: Buying Property in the First 2 Years9:16 - Stage 2: Getting Massive Choices In Your Life16:47 - How To Get Help Implementing This Strategy Recommended Videos: $15,000 in Passive Income From 1 Property 2 Year Strategy Transcription: Ryan 0:00Today, I want to share with you a really powerful concept called the property investment timeline. And this is something that I think is going to completely change the way that you look at property investing, and show you how you can actually change your life through property investing, both in the long term 1520 years down the track, as well about how you can create choices and freedom in your life in the short term, and how you can create those freedom and those choices in as little as two years using the two year strategy. So I'm really excited to share this one with you today. And I think this is going to revolutionize the way you look at property and help you really visualize how it can change and impact your life and how it's so achievable. And so what we've got here is a timeline going from zero, all the way up to 20. And each of these is representing years of our life. And so zero, this is the start, this is where we are today, if you're listening to this in the future, you started zero, not when this was published. But yeah, as you're listening to this, today, we are at number zero. Now what most people do and how most people will invest in property is within the first year or maybe two years, they'll go ahead and they'll purchase an investment property, that might be a house, that might be a unit, some sort of investment property. And what most people do in Australia is actually purchase property where the expenses are greater than the rental income. And that's called negatively geared property. And I'll represent that with a downwards arrow with money there representing that it's actually losing money on a weekly, monthly or annual basis. Now, what this means is that we own an asset, but the rental income isn't paying for the asset. So we need to put money into it. So how are we going to get that money? Okay, most of us we have a job, or we have a business, which then we put some extra money from the job or business into that property to keep it afloat to pay for the mortgage. Now, what we hope to happen is that over time, if we go 1520 years down the track, that house that we bought for a certain amount is now worth a lot more money, maybe we've paid off the debt on that property or paid off most of it. And now we can go ahead and sell that property for a profit. Or we can go ahead and live off the rental income for that property. But in the meantime, from zero all the way up to 20 years, we are tied to our job, and we need to have that job in order to support the property. And to pay off that property. rental income will grow over time. So maybe we'll reach a point around here where it becomes cashflow neutral and starts paying for itself, we're going a long period of time where we're kind of tied to our job and tied to our lives. So long term, this can be a great way to generate wealth, a lot of people make money through property using this strategy. But obviously, the more properties you buy using this negatively geared strategy, you know, you're starting with a little bit of negative money or negative cash flow. And then as you buy more properties, that negative cash flow grows, and as you buy more that negative cash flow grows again, as they need more and more money in order to afford these properties. And eventually, you don't earn enough money in your job. And so you can't afford it. And so you get tapped out in how many you can own until you go ahead and sell some of them for a profit or until the rental income grows. So what I want to show you now is a strategy that we're calling the two year strategy, when as little as two years, you can actually gain choices in your life. And this comes through building up a portfolio in the beginning. So in the beginning phase, which we call the buy phase from zero to two years, that's when we focus on buying high quality assets. So high quality houses in good areas in Metro markets that are likely to grow and be in demand over time, as well as generating positive cash flow from those properties. So those properties actually not only cover themselves and cover the mortgage and cover the expenses, but actually generate extra income as well. So what we do is we have our buy phase, then we have our phase of about another 13 years or it can be a little bit longer, which we call our choices phase. And this is where you focus on actually paying down the debt on those properties. And the reason we call this the choices phase is because you get choices in your life at this point, which we will talk about in a minute, but you actually have choices of how fast you want to pay down this debt. See, remember we got positive cash flow coming in. So we can actually use that positive cash flow to pay down the debt and the property will actually pay itself off. Or we can continue to work in our high paying job and put that towards the debt as well will actually get choices in our life. And then we reach the third phase, which we call lifestyle and that is where you know we own the property. Completely outright. And we can now go ahead and we're actually financially free and can live the life that we want. But the idea here is that we start living the life that we want over here at two years, not waiting until year 15 to 20, when we're old and gray to actually start living the life that we want. So how can we actually take these choices that we get in lifestyle and actually move it all the way back to year number two. And that's what's so powerful about the two year strategy, not about achieving financial freedom in two years. And you'll see through this strategy that that doesn't happen. But it's about getting choices in your life at the two year mark. So basically, what we focus on is in the first one to two years, is that we go out there and we buy a high quality house. Now we want to apply all the fundamentals of Metro markets, high quality markets at the right time of the cycle, buying goods, others buying a good property under market value with potential to add value to the property, all those underlying fundamentals we want to put into this purchase. So it's got the best chance of success, we then go ahead and build a granny flat on that property. So in the backyard, we can build a granny flat. And what this means is we're now actually getting two sources of income from the one property. Now me and Ben did this video on how to generate up to $15,000 in passive income from one property. And that's the idea here, the property is around 400,000, and rents for 380 per week, and the granny flat cost around 120,000 to build and rents for around $300 per week. So that's how we get our interest expenses on the mortgage looking at 3.3% because interest rates are so low at the moment. And then the income is the combined rent there as well as some depreciation on the new build. And so that gives us $34,000 in total rent, or $37,000. In benefit, if we include that tax benefit, which you obviously need to speak to your accountant about. This is just a super rough example. So after we take away the mortgage repayments, as well as other expenses like management fees, we end up with a positive cash flow of somewhere between 12 and $15,000 per year. So you can start to see how this is different already from the previous example, where you are actually tied to a job. So in the previous example, we needed a job in order to pay for the properties here, we don't actually need the job, because the properties actually generate extra income, which goes into our pocket. Okay, so Alright, we've got that there, we've got that property. And we've got at generating a positive cash flow there. What we want to do now is actually go ahead and duplicate that and do it again. So let's go ahead and do that. Again, we've now purchased two properties, built two granny flats, and we've got four incomes coming in, in total. The goal here is to actually do that within the first two years. So within one to two years in this buying phase of your property investment journey, you're actually buying two houses, and building two granny flats, how you do that is up to you saving deposits using equity, all of that sort of stuff is up to you. And we've talked about that in previous videos. Now it doesn't have to happen in two years, it could take you five years in order to do it could take you 10 years, depending on your income. For some people, they can actually do it in as quickly as one year, the owner really good financial position, it's not hard to go out there buy two properties straightaway, then get the builders to build two granny flats at the same time. And within a year, you've actually built up this foundation, other people as well, instead of doing two properties, they might want to go ahead and do four, or six, or a or three, or one or 10. And depending on what you do depends how big your income will be at the end here in the lifestyle phase. So you can actually change this and mix it up. We're calling it the two year strategy, because a lot of people can buy two properties, build two granny flats within two years. And that's achievable for most people. Now, how does this give us choices at the two year mark.