How Does Property Investment Work?
Short Answer: A Property Investment should make you money!!
Property Investment works in two main ways to earn you money, Capital Growth and Rental Income.
- Capital Growth is the increase in the value of a property over time. Properties increase in value because they return a higher percentage rate than the rate of inflation, which means that the property increases in value. So when you go to sell it, it is worth more than what you bought it for and therefore you should make a profit.
- Rental Income is the money that you get from having a tenant paying you for the right to live in your investment property. If the rental income exceeds all the loan costs and expenses, then that property is said to be cash flow positive.
Educating yourself about the right property investment, which will give you high Capital Growth and Rental Income is very important.
There are also many good property mentoring programs that can teach you about the property investment market and how you can make the most of it.
Property Investment should work for you and not against you. Don’t over-commit yourself by borrowing too much money and overly limiting yourself in other important areas of your life.
Make sure that major changes in your life are allowed for (as much as possible) so that your property investment is always affordable
There are lots of good books for learning how Property Investment works which can help you to learn and to start you on your journey to property investment success!
We’ve made a list of books that we have heard really good things about and have listed some here in our Property Investing Resource Section.