Having stuff is great.  I mean, we all need some stuff.  And having a secure roof over our heads is high on the list.  But some people become somewhat obsessive about what they have.  Rather than seeing the bigger picture, they let themselves get carried away.

 

This is especially true of property.

 

Many homeowners and investors begin to lose focus.  All too often, they fall prey to thinking that the more property they have, the more prosperous they’ll become. But this is not always the case.

The main driver behind buying multiple properties is equity.  Once you’ve paid off some of your mortgage, you own a portion of your house.  This gives you financial legroom to buy more.

However, there is such a thing as over-investment.  And it soon creates the following three major problems.

 

1. It ties up household savings

 

The property market can be volatile.  Just when you thought you had more equity and could buy more real estate, your dollar doesn’t go as far.  The market declines (sometimes for a good while), and you’re reluctantly having to dip into your precious savings.

 

2. It creates high household debt

 

According to The Guardian, Australia’s household debt is among the highest in the world.  On average, household borrowing to disposable income exceeds 200%.  That means we’re taking out loans for twice as much as we earn.  That’s gotta hurt in the long run.

 

3. It’s not really wealth

 

The simple truth is many homebuyers will never pay off their mortgages.  They end up on a pay as you go treadmill.  And it leaves them taking one step forwards, two steps back again.  Owners find themselves asset-rich but income poor.  Rather than providing cash flow, their home merely sucks up the savings on rates, utilities, insurance, and maintenance.

 

But now, let’s look at buying property through our syndication model.

 

Not only can you own a slice of an entire block of residences; you (a) don’t have to spend as much, and (b) reap better rewards.  It’s the smarter way to invest.

 

Want to hear more?

 

Get in touch with one of our senior consultants today.  They know what’s best.