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the hard question

hile residential property ownership is
attractive to many, it's often regarded
as something that limits your freedom.

But nothing could be further from the truth.

If you buy well in the first place, you'll own

an appreciating asset. You can then use the
equity you've built to purchase your next property
without paying for it from your wages.

Once you've built a reasonable portfolio,

you can work in a job that you love, rather
than working just to pay the bills. I have now
turned what I love property, television and
education into my part-time business, Empire
(www.yourempire.com.au), which supports me
day to day, while my properties look after my
long-term wealth.

Property versus other investments

There are generally three ways to achieve real
wealth today: business, shares or property.
Many people start their own business to escape
from a job but often end up working twice
as hard and you generally only benefit when
you sell. Share trading brings with it the danger
of margin calls which have brought down
many a millionaire.

On the other hand, property is easy to

understand, fully supported by the government
and banking system, and is stable (property
owners don't panic as shareholders might).

Property can also be self-funded, or provide
a passive income.

Make your property self-funding

It's cash-flowing the difference between the rent
and the mortgage that most people struggle
with. The key is to use the capital gain to finance
that difference. Draw on your capital gain
by refinancing your property (rather than
selling). By doing this, you forego expensive
transaction costs and capital gains tax while
keeping an appreciating asset.

Make your portfolio profitable

The key here is to buy well. Take into
consideration things that will value the property,
such as proximity to work, public transport
and leisure facilities. You'll need to put in the
research I look at 100-plus properties before
buying in a new area.

Investing for the long term by holding onto

your properties is a strategy that works for me.
I invest for growth rather than rent return.
As long as you can cash flow the property in
the short term, you can counteract the down
times, as most properties bounce back.

The ultimate key is if you have twice the

assets you should make twice the money, so
building a large portfolio steadily (with cash for
emergencies) is the way to go.

Property is often regarded as something that ties you down. On the contrary it can

be your ticket to freedom, says property expert and investor Chris Gray.

building wealth through property

Chris's top property-buying tips:

Do your figures first (with an

accountant who understands property).

Don't fear the gear debt is good

if you buy appreciating assets.

Choose high capital growth areas.

Try to pick a bargain, but make sure

it's a good grower, too.

Add value by renovating.

Use your equity to help cash flow

your properties in the short term.

Look at 100+ properties before you

buy or get someone to do it for you.

Reduce your risk by investing in

yourself and a good team of advisers.

For a FREE copy of Chris's latest
property investing book, The
Effortless Empire: The time poor
professional's guide to building
wealth from property, visit
www.yourempire.com.au