Friday 11 June 2021
The word financial freedom is a hot topic in property investing because property is an investment class that can certainly get you on track for attaining this freedom.
What is defined as financial freedom?
Financial freedom isn’t a ‘one size fits all’ but generally speaking it means not having to exchange time for money and having enough “passive” income to be able to enjoy a comfortable life.
If done in a certain way, you can own multiple properties & receive a good income with probably less than an hours ‘work’ a month. How? A property investment company can provide you with that ‘freedom’; from purchasing the property, progressing the purchase & finally managing the property, letting it out on your behalf. A property investment & management company are paid a %, usually around 10% of the monthly rent, to give you a hands-off hassle-free investment.
Why is property such a good way to generate passive income?
Generally speaking there’s not much you need to do with a property, if you buy right. There will be times when maintenance needs to occur, less so with a new property, & of course you could get a problem tenant & there may be voids in your property. However most tenants just want a nice place to call home & you won’t hear much from them. Additionally, the hassle & risks mentioned will likely be reduced with a property management company appointed as they have maintenance teams on hand & also do all the necessary comprehensive checks to ensure the tenant is in a position to pay the rent every month.
Property is also great because it has two gains – capital appreciation & monthly rent. Lots of people use property as a vehicle to provide them with a good retirement plan, as holding on to property long-term will generate a large chunk of cash due to the property going up considerably in value. Whether your goals are to have monthly income to provide a life you want to live on your terms now, or you are looking to the future, property is a great vehicle for both.
Where to start?
You might not have shed loads of money in savings or have a well paid job to do so quickly, so here are some top tips to get started.
Figure out what ‘financial freedom’ means to you & set a monetary goal with an attainable timeline. Excel spreadsheets are great for this – write down your income & current outgoings first. Look at what you have left once all your outgoings have been accounted for then divide this by your saving goal. The figure you come to will tell you how long it will take to save what you need with your current spending habits.
Make small sacrifices that will add up to a long-term gain. It’s often the smaller things we do that can actually add up to a huge amount over time. The exercise of point 1 above may make you realise that you’re spending silly amounts on your daily coffee or that your online shopping habit is getting slightly out of control. It all comes down to what you value more – having financial freedom or having these daily luxuries.
Figure out ways to make more money than you currently are. What about setting up a side-hustle to provide extra income to your main job? Or perhaps you are long overdue a pay rise at work – there’s no harm in asking your boss!
Surround yourself with likeminded individuals & read/watch motivational stories about people who’ve got to where you want to be. If other people can do it, you can!
Anything really is possible if you put your mind to it & you really want it. Make a plan, stick to it & enjoy the process.
