It’s no secret that a well-bought piece of real estate can pay dividends as a long-term investment. For new or inexperienced buyers, though, taking that first step on the property ladder can be daunting.
Property investment specialist Bushy Martin learnt how to build a portfolio the hard way. After an ugly divorce, he had to start from scratch, saving money to put towards property by moving back in with his parents in his mid-30s.
Some wise words from his father cemented Mr Martin’s desire to use property to achieve a good lifestyle.
“He … said ‘don’t work for money, let it work for you’,” Mr Martin said.
“Ultimately we are looking for freedom and freedom is driven around having time on our hands. We can only do that if our income is coming from somewhere else.”
Fast-forward two decades, and Mr Martin and his wife Sonya have built an international property portfolio and helped more than 1700 working Australians amass more than $600 million in property.
The couple started off as “rent-vestors”, saving for a deposit while living with family. They invested in low-risk, low-cost, high-growth index funds to grow a deposit large enough to leverage into property.
In his book The Freedom Formula, Mr Martin sets out a step-by-step property investment process that he says can help ordinary, working people “live more, work less and leave a legacy with property”.
“For those people who still believe that paying off the home and surviving on super will see them through retirement, they’re going to be in for a massive shock,” Mr Martin said.
“The average household income is $150,000, yet 73 per cent of retirees live on around $15,000 a year. Hence the reason to write a book, and help others to use property.”
Mr Martin describes his property formula as a “get rich slow, wealth by stealth” approach that allows mum-and-dad investors to spend 15-20 years accumulating wealth through carefully selected real estate.
He uses the acronym TLC to describe his formula. But rather than “tender loving care”, his TLC means “time combined with leverage with compounding interest”.
“Let that do its work and in 20 years time you’ll be extremely comfortable,” he said.
However, novice investors also need to ensure that they have done thorough research, and are aware the risks involved with property speculation.
Property Investment Professionals of Australia chairman Peter Koulizos warns prospective property buyers to watch out for unscrupulous real estate spruikers looking to make a quick buck.
“Avoid buying off-the-plan apartments and high-rises, go to as many property seminars as you can, but leave your cheque book at home,” he said.
“There are too many rogues looking to make money, so just research, read, listen to credible people, and find yourself a qualified property investment adviser and a respectable buyers’ agent if you’re worried you can’t do it all yourself.
“There are people who can help, just make sure you’re their No.1 priority and they’re not getting a secret commission.”