Thiago, founder of A9 Properties is a property investor, tech entrepreneur, father and husband. He has 20 years of experience in software engineering and 10 years experience in real estate investing. Below Thiago tells us the importance of investing in real estate to help create long-term financial success and why he chooses this investment market over any others.
Let’s be honest with ourselves, it’s not easy to get out of our comfortable zones. Stepping out of our comfort zones requires change, courage and resilience, and when it comes to investing in real estate, cutting down on expenses and rearranging our lifestyle is not something most of us are willing to do. But what if I tell you that if you put aside 20% of your income and learn how to invest in real estate, you can fast-track your financial independency and be financially free in 15 years!
By saying “financially free”, I mean receiving enough rental income that will cover all your fixed expenses. This is not a get-rich quick scheme, nor is it a short term strategy. Real estate investing is best at long term and will become easier after your first property. I have been investing passively in real estate for 8 years and I’m happy to say that 40% of my fixed expenses are being paid by rental income generated from my properties. Using a variety of strategies, I expect to have 100% of my expenses covered by passive/active income generated by properties in 3 more years.
If you don’t own a property yet, the only debt you may have is a car loan, university loan or a credit card account (or two). I call these debts “bad debt”, since they are just liabilities. The thought of purchasing a house, applying for a home loan and seeing yourself owing roughly half million dollars to banks does indeed make most people uncomfortable. That little voice inside your head keeps asking you: “What if I lose my job and can’t repay the loan?”, “What if interest rates go up?”, “What if this?”, “What if that...”
The thing is, if you leave your hard earned money in the bank, inflation will eat most of it. High interest savings accounts in Australia are a joke, these savings accounts give you little to zero rentability over inflation. The so called “high interest” savings accounts are easy to get and are a “no-brainer”. Well, this lack of brain usage is probably costing you thousands of dollars. How about skill up your brain and put your money to work for you? Invest in yourself by attending real estate and property seminars and absorb as much information as you can. Invest your money into assets that do give you the return you want…
Many people have obtained wealth by only investing into real estate and it has been proven in history that the longer your real estate has been held for, the more money you are able to make. The Australian housing market has and will continue to recover from past bubbles which has resulted in homes decreasing in appreciation. Investors who have held on during uncertain times, have seen prices return to normal and appreciation get back on track.
Buzz words such as buy and hold and diversification are heard around the property sector, however I believe that diversification is a safety net against ignorance. The idea is to focus your efforts in learning. The more you learn, the more the risks decrease. There is not a buy and hold strategy that fits all sizes, buy and hold is the most known, but there are many strategies you can apply when learning about property investing.
It's always important to have money working for you. whether it is through real estate investing or the financial market. Just remember though, that when it comes to the financial market or currency trading, there is less control over the results. Shares can be affected by other countries doing well or not, or by a companies performance. The real estate market is still volatile, however there are strategies you can put in place that can protect you from market downturn. Whether you sell your property or not, or interest rates move up or down, you will still have rent coming in - enabling you to still generate income and be able to pay your mortgage.
Investing in real estate is a choice that you won’t look back on. My advice is to absorb as much information as you can, surround yourself with like-minded people and find strategies that work for you. Before you know it, you will be on your way to financial freedom!