Common points of “salaryman investors” who succeeded in real estate investment

Common points of “salaryman investors” who succeeded in real estate investment

For real estate investment, clear goal setting is the key to success

In my daily contact with salaried workers who have succeeded in real estate investment, I felt that it is the goal setting that makes a difference in the results. The clearer the goal, the faster the success.

 

When asked about their goals for those who are about to start investing in real estate, many people say, “For the time being, I wish I had a monthly salary of about 1 million yen.”

 

The goal here is to think about “how much money you have left each month” in terms of cash flow. Cash flow is the amount of money that remains after deducting expenses from income, and is the amount of money that remains on hand after repayment of loans to financial institutions and taxes from rent income.

 

If you want a monthly cash flow of 1 million yen, first think a little about whether you can buy a property that can expect a monthly cash flow of about 1 million yen, and whether you can get that much loan in the first place. ..

The CF that can be obtained from a property of 50 million yen is targeted at 2 million yen per year.

For example, a salaried worker with an annual income of 10 million yen can get real estate with a loan of about 300 million yen. If you can buy a property of about 300 million yen, you can aim for an annual cash flow of 12 million yen. If this becomes a property of about 100 million yen, the cash flow will be about 4 million yen per year.

 

Also, suppose that the property price is 50 million yen, the rent income is 5 million yen, and the operating expenses such as repayment and management expenses are about 3 million yen. If you have an income of about 2 million yen left, it is said to be a “pretty good property” in our industry. If there are 5 such investment properties, the annual cash flow will be 2 million yen x 5 buildings, which is 10 million yen.

 

With this breakdown, many people are aiming for a cash flow of 10 million yen a year.

Even when using it as a substitute for pension measures or life insurance, make detailed calculations

The purpose of investing in real estate is not limited to cash flow. Some people will start investing in real estate for the purpose of pension measures. In that case, it is a good idea to think about how old you should be and how much you should secure each month, and then what kind of financial plan is effective.

 

Others, such as those who are married and have children, are thinking about investing in real estate in case of emergency to their families, as if it were a substitute for life insurance. If that is the purpose, even if it should happen, the focus will be on what kind of condition you will need, how much your family will need, how much your current insurance is not enough, and what will happen if group credit life insurance is applied

Real estate investment does not require such a large amount of own funds

As you set goals, you are concerned about your own funds. I think that beginners are more serious about thinking that in order to reach their goals quickly, it is better to save money on a daily basis and save however much of their own assets as could be expected.

 

 

As a matter of fact, real estate investment does not require much self-financing. Even if you have your own funds, it is better to keep them at hand in case repairs occur later.

 

For example, suppose you buy a property worth 100 million yen. Including various expenses, the initial cost required in addition to the purchase price of the property is about 5 million yen. Fees include registration fees, taxes, fire insurance premiums, and brokerage fees.

 

In fact, you can pay all the expenses of 5 million yen with a loan. In that case, you can create a state where cash flow is generated without paying even one yen.

 

However, this is an extreme example. If possible, save some money and use it for various expenses and down payment when purchasing a property.

Let’s know that it is better to get a loan in terms of investment efficiency

In addition, considering investment efficiency, receiving a loan without relying on own funds creates a leverage effect and improves investment efficiency.

 

Looking at the ROI explained in Chapter 2 from the perspective of self-financing, you can see that if the self-financing is halved, the investment efficiency will be doubled.

 

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