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How My First Property Made More Than My Entire Year’s Salary

By February 17, 2020 No Comments

WHO NEEDS A SALARY WHEN YOU HAVE PROPERTY INVESTMENTS?

I have always been interested in property and wanted to build a property portfolio. Although I knew that investing in property could be lucrative, I was not fully aware of how lucrative. This quickly changed after my first property investment.

I had ample time to educate myself on property investment as I did not have funds or financing capacity to acquire my first property yet and was not aware of all the ways one could acquire property without capital or financing capacity. My wife (girlfriend back then) and I attended seminars, read books and met with property investors. This part of our journey was extremely important as this preparation and education helped us build a successful property portfolio.

Read one of our previous articles, 5 Ways to Finance your Property.

I was in business for a while and then got offered a job with a lucrative salary for someone my age (R15,000 p/m or R180,000 p/a). I never wanted a job as I was very passionate about business, but when I received this offer, the first thing that went through my mind is that if I took this job, I would be able to get financing for my first investment property. Looking back today, I am very thankful for the jobs and bosses I had as the experience and exposure I gained were crucial for what we are doing today.

A couple of months after I took my first job, we pulled the trigger. We looked for a property BELOW market value and were fortunate to acquire our first property WAY BELOW market value. Acquiring a property below market value gives you protection against the downside of property investment and has so much upside potential.

In one of our previous articles, Ready, Set, Negotiate! we discuss why someone would sell a property below market value.

We bought an R750,000 property for R525,000, which was a profit of R225,000, even though we could not “cash in” immediately. The total amount of “work” to acquire that property was probably equivalent to one week’s work, but it made me more money than my entire year’s salary! I then realised that I WANT TO invest in property! We refinanced this property a few years later, and the funds made available were enough to acquire three more properties (deposits and transfer fees). I don’t like selling properties; I would rather refinance.

Property is a great way to invest and a great hobby to have while working or running a business. At that time, property investment was a hobby for me. Today I am in property investment full-time because it enables me to do what I love! Also read one of our other articles, 10 Things We Love About Property Investment, where we share ten property investment lessons we have learned in the last ten years.

 

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