The 4 Phases of Property Investing

The 4 Phases of Property Investing

The property investing journey is defined by four different phases. I came up with these to help people understand what they need to do and be looking for in each phase to help them achieve their goals.

Phase 1: Save

The first phase is to save, save, save. I’ve talked about this in other posts so I’ll just give you the short version. In this phase, you don’t have any property yet and are working hard to get into that first property. You learn everything you can about property and borrow from family if you can. And if you can’t, you live a spartan existence and save like crazy.

Phase 2: Accumulate

Once you have your first deposit saved, you can go into the accumulate phase.  You buy where it’s booming and leverage from one property to the next. Buy as much property as you can without over-committing yourself. Always make sure you’re positive cashflow after tax. This is critical if you want to keep moving forward.

Phase 3: Consolidate

The accumulate phase has to end eventually, because if you want to retire, you need to allow your properties to sit and build up passive income from surplus rent. This is consolidation. You can’t do this in the accumulate phase, because any extra income, equity, and rent are going towards acquiring your next property.

When do you want to time this? Ideally, about 5 years before you want to retire. Stop buying and let things grow on their own. Your strategy at this point could also include restructuring any debt to eliminate personal debt, like any mortgage on your own home. This might involve increasing the mortgage on an investment property and pay out the mortgage on our own home.

Phase 4: Retirement

Finally, you reach the retirement phase, or financial freedom. In this phase, you can live off the surplus rents, have fun, do whatever you want, ring your friends on a Wednesday and ask them if they want to go jet skiing (even though you know they’re at work) just to give them a hard time, and tell them that they should have listened to you.

But the thing about retirement is, it’s a fluid state for a property investor. It gives you options. As your rents continue to rise, your passive income (and disposable income) will continue to grow, which means that the banks will lend you money again. I’ve seen many property investors reach the retirement phase only to decide they’d like to start accumulating again, and that’s perfectly fine too, and they can continue to live off the passive income while they do it.

Now that you know what phase you’re in now, and where you’re headed, think about the next action you need to take to stay on track and achieve your goals.

Daimien Patterson is the CEO of Integrity Property Investment, a property investment company based in Australia. He regularly produces books, blogs, and videos on the topic of property investing. Head to [integritypropertyinvestment.com.au/pi4b-webinar-recorded] for instant access to Daimien’s free property investing webinar where you will learn all the things they didn’t teach you in school!

Previous Post
The 3 Golden Rules of Property Investing
Next Post
How To Buy A Property With Your Super

Leave a Reply

Your email address will not be published. Required fields are marked *

Fill out this field
Fill out this field
Please enter a valid email address.
You need to agree with the terms to proceed

Legal Disclaimer: This information ('the information') is presented for illustrative and educational purposes only. It is not presented nor should it be treated as real estate advice, legal advice, investment advice, or tax advice. All investments involve risk and potential loss of money. If you require advice in any of these fields you should contact a suitably qualified professional to assist and advise you. Your personal individual financial circumstances must be taken into account before you make any investment decision. We urge you to do this in conjunction with a suitably qualified professional. Daimien Patterson, IntegrityX Enterprises Pty Ltd, and their associated trading names, companies, researchers, authorised distributors and licensees, employees and speakers do not guarantee your past, present or future investment results whether based on this information or otherwise. Daimien Patterson, IntegrityX Enterprises Pty Ltd and their associated trading names, companies, researchers, authorised distributors and licensees, employees and speakers disclaim all liability for your purchase decisions. You should do your own independent due diligence and seek the advice of qualified advisors before making any investment decision.