What about part of a bench top or a piece of carpet.

How about a couple of bricks?

Of course, there’s no way.

And this is the big problem with investing in property.

Most of it is paper money. That’s when you flick through realestate.com.au and see a house in the same street as your property and you realise you’ve made money.

Problem is of course, you can’t spend it.

And there’s the big problem with property investing.

You get to feel rich when you’ve got 4 houses each worth $200k more than when you bought them.

But when things are tight and you need some extra cash?

That’s when people start selling. And often in a down market.

(Interest rates go up, house prices slow, people sell, there’s too much supply, prices start dropping. That’s the basic cycle).

OK.

Now, this is a problem for a lot of investors. And there’s a reason for this.

It’s because they invested without looking at the whole picture.

The accountant says they should look at property so they buy the house one street over because it came up for sale.

And the garden’s pretty.

And if they live there, it MUST be a good neighbourhood, right?

But that’s not planning, that’s being rash. And it’s a costly mistake.

Now, the best part of real estate is capital growth because that’s real wealth.

You can hold your portfolio, and over time the rents go up and you’ve got a growing income.

Or you can cash one of them for a huge payday.

You can sell a couple and pay the loans on the other to be debt free.

Options galore, right?

But in the meantime, you need money.

Especially if you’ve got kids who never stop eating. And rip their clothes the first day they wear them.

And they always want a bit of extra cash for who knows what, right?

School fees, petrol, then you’ve got to put a roof over their heads.

It never ends!

And this is where the plan comes in.

It’s where you balance out capital growth and income, and maybe sacrifice one for the other.

It could be that you need more cashflow so you can get your next loan.

Or you might have plenty of income so you go for the growth.

Perhaps there’s a renovation project inside you bursting to come out.

Or you’re more ambitious and want a block of flats you can turn into a motel (Monopoly wise).

These are all the bits you have to consider if you want to make this investing gig successful.

Because otherwise, you might find yourself at the checkout one day trying to pay for your food with half a front door.

Have a great day!