How To Retire Early Through Property Investing – 10 Tips From Those That Have Done It
In everything I do I try to look for people who have already done it and emulate them. If someone has already achieved it then the chances are that if you take the same actions you can receive the same (or similar) result.
If your goal to retire early from investing in possible then it would be wise to listen to the advice of those who have already achieved financial freedom. It might not be wise to listen to people who are still slogging it away at work and aren’t one step closer to retiring early.
We have collected the top tips from investors who have achieved financial freedom and have been able to retire early by investing in property. This is not a list of strategies for retiring early, but a set of tips that you can apply to almost any strategy you have decided to use.
1. Buy Your Home Last Not First
Most would-be investors seek to buy their home first and then go and purchase their investment properties. In many cases this makes complete sense. A home offers you security and stops you paying dead money (rent). But many retired investors have said that it can be very beneficial to buy your home last as it increases your borrowing capacity.
2. Approach Each Property With The Goal Of Creating a Win-Win
If you approach each property deal where you are creating a win for you and a win for the seller then the chances are you are going to lock in a good deal. When you are the seller you want to create a win for you and a win for the buyer. Keep that win-win mindset and it will cause you to be creative and to get the most out of each deal.
3. Look For Properties You Can Immediately Add Value To
If you are just starting out then you can build capital quicker if you can find properties that you can immediately add value to. A small cosmetic renovation can a increase rental returns (helping your cash flow) and it can also increase your equity allowing you to leverage and buy more property quicker. But be sure not to over capitalize.
4. Ask Yourself “Could I Sell This Property Immediately and Still Make A Profit?”
Thinking with your head and not your heart when buying property is extremely important. A helpful question to ask would be whether you could turn around and immediately sell the property and still make a profit on it after expenses. The experts say “You make money when you buy” so look for properties where you make money just by buying it.
5. Continually Assess Your Properties And Sell To Free Up Capital
There is an old saying that says “You don’t lose money until you sell.” But investors who are already financially free have sold underperforming properties so that they can invest in properties that will give them a greater return. Just because you only bought it 12 months ago doesn’t mean you have to keep it. Constantly assess your investments and look at selling to free up capital for higher returns where possible.
6. Don’t Be Influenced By Negative Attitudes of Friends or Family
The negative attitudes of friends and family can quickly hold you back from investing in property and it can also hold you back from growing your property portfolio. Free advice is usually the most expensive advice. The general rule is if they are already doing what you want to be doing (being financially free etc) then their advice is likely to be good. If they aren’t where you want to be then their advice (although well meaning) probably will not help you.
7. It’s Never Too Late To Get Started
Whether you are 25 or 55 it’s never too late to get started investing in property. You can make money quickly in property and of you never get started then you are going to be missing out on great opportunities. Financially free investors used the fear of living on a pension and not being able to do the things they wanted to do as motivation to get their foot in the door and get started.
8. The Best Time To Get Started Is Now
The more time you give yourself to let your investments grow the easier it will be to achieve financial freedom before the official retirement age of 65-67. If you wait for everything to be perfect before you buy an investment property then you will never get started. Look at getting your foot in the door as soon as possible. Check out our post on how to save your deposit quicker.
9. Do Your Homework Before You Buy
Always do your homework before you buy. Research different areas and choose the area that is best for you. Investing close to where you live might not always be a wise decision. There is always a good deal to be found somewhere in the country. It is important to do your homework first and find these great deals.
10. Set Solid Goals For Yourself and Take Massive Action
How many properties do you need to own in order to be financially free? This will vary for every investor bases on their goal income and the price and rental returns of the properties. Set a realistic goal (Maybe it is 10 properties in 10 years) and then take massive action to get you closer to that goal. Go and research areas, speak to banks and real estate agents and look at potential investments.
If you know your goals and what you want to achieve it is easier to focus your property search because you can cancel out all the properties that won’t get you closer to your goal.
Hopefully by using these tips you can join the list of investors who have officially “made it” and no longer have to work in order to maintain their lifestyle.
But lastly, I’d encourage you to live your best life even before your financially free. I do that by going on local hikes, spending time with friends and family and working on things I’m passionate about. Don’t let life pass you by while you’re investing.