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The Power of Gearing Exponential Growth 100.000 investment property…. 20% Deposit 80% Mortgage.

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Presentation on theme: "The Power of Gearing Exponential Growth 100.000 investment property…. 20% Deposit 80% Mortgage."— Presentation transcript:

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2 The Power of Gearing Exponential Growth investment property…. 20% Deposit 80% Mortgage

3 Deposit Mortgage The Mortgage remains the same throughout…. …and you benefit from all the increase in equity value Equity growth in value The Power of Gearing Exponential Growth

4 Each year assuming a property grows in value by 5%… Deposit Mortgage Year One growth: Two Year growth: Four Year growth: Five Year growth: Three Year growth: For Illustration Purposes Only the Figures are Based on 5% Annual Growth Ten Year growth: ??????? The Power of Gearing Exponential Growth

5 How does this translate into real money? 20% Deposit 80% Mortgage With a investment property… Deposit of Mortgage of Growth rate of just 5% Net compounded Growth after 10 years of The Power of Gearing Exponential Growth Compounded (exponential) growth in value

6 Compare this to a long term savings account Compare this to a long term savings account at 5% interest Capital of in a savings account Compounded Growth after 10 years of Capital of in an investment property Compounded Growth after 10 years of Which would you prefer? The Power of Gearing Exponential Growth

7 Leveraging Your Money Imagine you buy an investment property… Investment

8 Leveraging Your Money How does this translate into real money? Investment With a investment property… Growth rate of just 5% Net compounded Growth after 10 years of Compounded(exponential) growth in value growth in value

9 Property 2 100,000 Deposit 20,000 Passive Income 200 p.m. Leveraging Your Money Property 4 100,000 Deposit 20,000 Passive Income 200 p.m. Savings 100,000 Property 1 100,000 Deposit 20,000 Passive Income 200 p.m. Property 3 100,000 Deposit 20,000 Passive Income 200 p.m. Property 5 100,000 Deposit 20,000 Passive Income 200 p.m. 1,000 monthly passive income 1,000 monthly passive income

10 Leveraging Your Money k Total Property Portfolio Value k k k

11 Leveraging Your Money Leveraging Your Money So if you invested in 5 properties instead of just one property… x Deposits of Growth rate of 5% Compounded Growth after 10 years of: x 5 Compounded Growth after 10 years of: x 5

12 Your Property Investment at average growth over 10 years at 5% would give you an extra Your Property Investment at average growth over 10 years at 5% would give you an extra ( x 5 properties divided by 10 years) per year PLUS Yearly Passive Income Leveraging Your Money For Illustration Purposes Only the Figures are Based on 5% Annual Growth per year per year

13 Property Price Agreed Purchase Price Discount Negotiated Plus associated costs: Deposit of 15% required Taxes Legal Fees Broker Fee Total Costs MONEY IN YOUR POCKET ON COMPLETION PLUS BUILT IN EQUITY OF Built in Equity - BMV

14 Monthly Income of 6 Rented Rooms 125 per week 2.708pcm Costs: Monthly Mortgage Payment at 5% 1.363pcm Monthly Costs e.g. Gas, Electric, Local Tax, Cleaner, Gardener etc 400pcm ________________________________________ Passive Monthly Income 945pcm PASSIVE INCOME 945pcm Passive Income

15 Property Price Agreed Purchase Price Discount Negotiated Plus associated costs: Deposit of 15% required Taxes Legal Fees Broker Fee Total Costs CASHBACK ON COMPLETION PLUS BUILT IN EQUITY OF Built in Equity - BMV

16 Monthly Income of 6 Rented Rooms 125 per week 3.250pcm Costs: Monthly Mortgage Payment at 5% 1.664pcm Monthly Costs e.g. Gas, Electric, Local Tax, Cleaner, Gardener etc 400pcm ________________________________________ Passive Monthly Income 1.185pcm PASSIVE INCOME 1.185pcm Passive Income

17 Total of Built in Equity + Amount of in your Bank Account + Passive Income of Per Month With just 2 Properties ….

18 Real Estate


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