ACHIEVE MORE WITH LESS EFFORT
Leverage is like the secret sauce of success in your property investment endeavours. Whether it’s time, money, or skills (or all of them), leverage allows you to do more with less, magnifying your efforts and amplifying your results. Imagine having the ability to move mountains with a small push or turn a small ripple into a tidal wave — that’s the power of leverage.
At its core, leverage is about using available resources smartly to maximise the output. It’s a force multiplier and allows you to achieve feats that might seem daunting at first glance. By using leverage, you can optimise time, money, and skills, turning them into catalysts for unprecedented growth and success.
Below are six things you need to keep in mind if you want to succeed in property investment using leverage:
Three leverage-related acronyms to remember:
1. OPM – OTHER PEOPLE’S MONEY
Very few people become rich without understanding this principle. When you have limited cash or capital and you want to build anything sizeable, it will require external funds. These funds can be obtained through different avenues, including investments from external parties i.e.:
- Getting investors or business partners to invest with you in a property or
- Securing financing or loans from the bank or other financing institutions.
You could even venture outside the box and obtain OPM through crowdfunding or credit card financing. Using borrowed capital can magnify your potential returns and expand investment opportunities without having to solely rely on your personal funds.
Remember, the bank wants to lend you money to invest in property, and if your structures are right, they will lend you more money than you think!
2. OPS – OTHER PEOPLE’S SKILLS
It takes a lot of skills to build a successful property portfolio. Surrounding yourself with an entire investment team is one of the best things you can do as a property investor. This team will include property mentors, attorneys, accountants, bankers, bond originators, estate agents, letting agents, and maintenance specialists.
No matter how hard you try to succeed in property investment all by yourself, at some point, you will need others to help you! You are going to be hard-pressed to do everything by yourself and even if you could, it is impossible to be good at everything.
Leveraging OPS in building your property portfolio enables you to tap into a wealth of expertise, diversify your capabilities, and optimise the success and growth of your real estate investments!
Read our article, How To Build Your Property Investment Team.
3. OPT – OTHER PEOPLE’S TIME
Every single time any task or activity comes across my desk, I ask myself: “Is it possible for me to delegate this task to someone in my team?” Time is the most precious commodity that you will ever have and the sooner you realise this, the better.
Warren Buffett once said, “The rich invest in time, the poor invest in money.” As a property investor, time is one of your most finite resources. There is only so much that you can do in the 24 hours you have today. And if you don’t learn to leverage other people’s time, you will never build anything of significance. The more time you free up, the more you can focus on strategic decisions and expanding your portfolio!
Start leveraging OPT today with some of these ideas:
- Outsource or delegate tasks like property management or repairs
- Use professional services (legal, financial, construction, etc.), and
- Automate or use software.
Read our article, How to Automate your Property Portfolio.
Three leverage-related facts to remember:
FACT #1 – IF YOU DO WHAT EVERYONE ELSE DOES, YOU WILL LIVE THE LIFE THAT EVERYONE ELSE LIVES.
For many people, this means a life of never enough or just enough. To illustrate this, let’s consider the concept of saving.
Most of the middle class believes saving is what you ought to do, but Robert Kiyosaki used to say, “Savers are losers!” Needless to say, his statement offended many people. But he’s not wrong… One of my mentors used to tell me, “You don’t save yourself rich, you buy yourself rich”. So, how can you get a different life than everyone else?
Read our article, Here’s Why I Am Buying As Many Properties As I Can (While Others Are Selling).
FACT #2 – YOU BUY YOURSELF RICH BY BUYING ASSETS.
The trick here is to buy as many appreciating and income-producing ASSETS as you possibly can. And how do you do that? Leverage, my friends!
Leverage simply means to do more with less. You only have so much money, capacity, and skills. And sadly, you won’t achieve much if you only make use of what you have. I learnt this the hard way by trying to create wealth using only my money, time, capacity, and abilities. And I went nowhere slowly.
FACT #3 – PROPERTY IS THE ABSOLUTELY PERFECT INVESTMENT TO LEVERAGE.
Property’s unique attributes make it the ideal investment to leverage. It’s a tangible asset with intrinsic value and provides a solid base for securing loans, making it favourable to lenders.
Its potential to appreciate in value over time, generate a stable income through rent, tax advantages, and its ability to hedge against inflation also make property a prime choice for leveraging. By understanding the unique benefits of property, you can harness the power of leveraging and maximise the opportunities for greater success, growth, and profitability.
Therefore, if you want to succeed in property investment, always remember these acronyms and facts. Then you can go forth, and leverage, leverage, leverage!
Read the entire article in the April Edition of Real Estate Investor Magazine.