FINANCE
Passive Income
The best way to make money in property
BY GERT VAN STADEN
Over the last few articles, we have discovered that passive income is the key to wealth, and that property investment is the easiest way to generate passive income. The next question is: what is the best way to get passive income?
At P3, we believe the best way to generate passive income is one that:- minimises your risk- generates ongoing, inflation-linked dual returns- extends beyond the investor’ s lifetime to create intergenerational wealth.
There is only one source of passive income that delivers all these benefits: buy-to-let property investment.
Minimising your risk All investment entails risk. However, what sets buy-tolet property apart from other investment options is the ability to manage – if not eliminate- the risks involved through tried-and-tested risk management strategies that are simple and cost-effective to implement. In fact, buy-to-let property investment is virtually riskfree if prudent risk management strategies are applied.
Generating ongoing, inflation-linked dual returns
Buy-to-let property offers multiple- and therefore higher – returns, in the form of an immediate and ongoing inflation-linked income as well as long-term capital growth.
A well-chosen and well-maintained buy-to-let property in the right area with a high and sustainable demand for rental properties will continue to produce an ongoing monthly income for as long as the investor owns and rents out the property. The rental also increases each year in line with inflation or with the percentage stipulated in the lease, usually 8- 10 %.
In addition to this ongoing, inflation-linked income stream, buy-to-let property investors also enjoy steady capital appreciation on the property itself, as the value of the property increases over time. It is a well-known fact that inflation boosts physical asset prices like gold, silver, oil and property.
Creating intergenerational wealth Most investors building a retirement fund are concerned about building up enough capital so they can retire and won’ t outlive their retirement fund. A buy-to-let property portfolio creates a passive, inflation-linked income and capital growth for life- and beyond if the properties are acquired in a correctly-structured trust. In countries such as the UK, estates and properties held in family trusts have been generating a steady, predictable passive income and capital growth for the original landowners’ descendants for 300 or even 400 years. Not only will such a property portfolio assure your retirement fund – no matter how long you live – it will also generate passive income and capital growth for your children, grandchildren and future generations.
Implementing the best way The 2500 members of the P3 Investment Group are doing exactly this: implementing the best way to generate passive income- the way that is low risk, offers dual returns and creates intergenerational wealth that extends beyond the investors lifetime.
Don’ t miss the next articles to find out more about P3’ s unique 3-pronged approach creating passive income. We also invite you to visit http:// p3propertyinvestments. co. za to sign up for our free 13-part course detailing the step-by-step way to create passive income through property investment.
SPECIAL INVITE FOR REIM READERS You are invited to watch an online video presentation by Jacques du Toit, property analyst at Absa Home Loans, sharing must-know insights for property investors with P3 members at a recent P3 seminar. Jacques’ insights are so crucial to property investors at this time of change and volatility, we are pleased to share it with REIM readers – simply visit http:// p3propertyinvestments. co. za and follow the link to Jacques’ presentation.
RESOURCES
P3 Investment Group
www. reimag. co. za SEPTEMBER 2016 SA Real Estate Investor 21