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The thought of owning and letting out property appeals to many, but the journey to building wealth through property investing involves more than just collecting rent. Indeed, as the Wealth Through Property event summarises, becoming successful in property requires an understanding of several key strategies. Potential property investors can progress further by engaging in proven techniques and applying them to their chosen ventures. 

The training offered by the Wealth Through Property course is set out over two days, and is designed to teach property investors about the latest property strategies and get their property portfolios started. Furthermore, the knowledge gained at the event can help investors to better manage their finances and personal lives.  

The team behind the event, led by Paul Smith, Touchstone Education co-founder, consists of trainers with real-life investing experience and their own property portfolios. This team has tried and tested the strategies offered, and the result is a learning process that can help budding investors find their way into the property market.  

While it is possible for property investing to be financially rewarding, investors must know what it entails before putting their time and resources into it. Understanding what is involved puts individuals in the best position to handle whatever comes their way.  

Creating Value 

The majority of wealth in property investing is built through appreciation, which is the rising of property prices over time. While price fluctuations are normal, it is the eventual increase in long-term value that helps investors build wealth. Appreciation becomes an even more powerful factor in wealth creation when it is coupled with leverage. Experienced investors who use external funding (for example, from a bank) can realise significant returns on investment compared to those who use their own money to purchase property.  

An essential aspect for property investors to keep an eye on is cash flow, which is the money left over after taking care of expenses. Most properties have costs such as management fees, insurance, maintenance and mortgages to handle, with the rent collected expected to facilitate these. Positive cash flow is experienced when a property’s income exceeds its expenses. 

Sound Logic 

In most investments, people purchase assets hoping that they will appreciate and can be sold for a profit at a later date. In other forms of investing, such as buying a business, the investor might be hoping to improve an asset’s performance and increase its value. In both of these scenarios, the underlying belief on the investor’s part is that they are putting their money into something they hope will be of greater value in the long run. If such a belief is based on sound logic and principles, this can pay off. 

This distinction is what sets wise property investors apart. They don’t rely on appreciation alone to deliver results, but instead make their decisions based on sound investing principles. They know that if a property produces more income than it costs, it will be a successful venture. Such investors don’t worry much about what the market does, as their decisions are designed to keep their investments safe during downturns.  

Handling Depreciation 

While some take the term to mean a decrease in value, depreciation describes an investor’s ability to write off part of an asset’s value every year. When handled effectively, depreciation can provide a way to reduce the tax burden on a property portfolio, giving investors a way to protect their investments. Getting the most out of this tax benefit should be handled with the help of a professional accountant.