Birdseye view of multiple houses and streets

Is Property Investing Your Ticket To Achieving Financial Freedom?

We would all love to have financial freedom. The idea of spending your days doing whatever you want, whilst having your money flooding into your bank account effortlessly. For the small percentage of the planet who live a jet-setting life, they have either worked their butts off to get there or been born the lucky children of said people who have worked hard to earn their fortunes. Luckily, there is still a chance for the rest of us to build wealth and achieve financial freedom. One of the best ways to get started building a pot of secure money is to begin property investing.

Property investing is not something we are all knowledgeable or experienced in, but it is an industry that we can all get started in no matter the level of experience or knowledge. It is important to keep in mind that although property investing has achieved financial freedom in some cases, there is still a right way and a wrong way to make the business structure work for you.

What Is Financial Freedom?

Everyone seems to have their definition of financial freedom. Some may define financial freedom as paying for things without needing to check the bank balance, and others would define financial freedom as earning a certain amount of income each month. Whatever you would decipher financial freedom as being for you, the overall idea is having free-flying money that does not require you to exchange your time earning it. You essentially could be sleeping and generating money regardless of what actions you take, hence the attraction towards achieving this level of wealth.

The Genres Of Freedom

Different types of financial freedom need to be taken into consideration when deciding what you are hoping to achieve through property investing.

Time freedom – Time freedom is defined as the time that you live freely by your means and the rest of the time that is controlled by external obligations. For example, if you are currently working in a 9-5 job, a lot of your time will be consumed by your obligation to work for the company. Although this role may be generating you a large wage, you are consequently time-poor due to the portion of the time needed to be exchanged for income. If you are looking for time freedom, the ideal scenario would be working for a minimal time per week for a maximum income.

Location freedom – Achieving location freedom would be defined as not being tied to a specific geographical location to generate your cash flow. For example, if your workplace is within one location, you will not be able to jet off to the Maldives to complete your work tasks from there. If you are looking to achieve location freedom you need to find a source of income that is not location dependent. Property can achieve this, but you have to have a streamlined system.

Financial freedom – Finally, financial freedom is defined by the level of income you have free-flowing that allows you to not be tied to financial restraints, and funds the lifestyle you want. Financial freedom does not mean that you are the richest person in the world. Financial freedom as mentioned will mean something different to each person. You might achieve financial freedom, but not be able to achieve location freedom due to being tied to a location. You can achieve all freedoms, time, location, and finances with property, but this requires time and heavy sacrifices.

How Lucrative Is Property Investing?

Property investing can be very lucrative, but this is highly dependent on the strategy of your choice. If you have a large pot of money to get started in property, you have a better chance of expanding its value. This does not mean to say low investment properties can not generate a good return, but this money will need to be recycled multiple times before you can reap the rewards of your work. 

There is of course a common misconception that depending on the economic environment, you should hold off on making certain investments in property. All of the most experienced property investors understand that there is no bad time to invest in property, so don’t let this scare you off from getting started. It should however highlight the importance of getting the right education in the subject matter, to avoid making costly mistakes.

What Strategies Are People Following?

There are some different property investment strategies that people are making money from. Even if you have no capital to invest yet, there are strategies to start building your pot of money:

  • Single buy-to-let investments
  • BRR (Buy refurbished refinance properties)
  • Holiday let property 
  • R2R investing (Rent to rent)
  • Social housing investment 
  • HMOs (houses of multiple occupants)
  • Property sourcing 

If you wish to do more research into each method, there is a large portion of the information available. Property sourcing and rent-to-rent properties require a much lower initial investment than actually buying a property, so keep that in mind if you are looking to get started.

What Is At Stake?

As with any investment, there is a lot at risk. It is not uncommon for people to invest hundreds of thousands in properties that end up generating no cash flow for them, and even losing a portion of their initial investment. Many things can go wrong, such as planning permission being denied for an extension which will increase the value of the home, or something as simple as your tradesmen causing damage to the property. 

Additionally, there are a lot of educators who work within property who claim to teach people to grow their wealth and achieve financial freedom, when in reality they are simply scam artists Beware of the people who are looking to pray on beginners in property, as most of the time they are only interested in getting your cash. 

Additionally, if you are looking to become a landlord, you are most likely guaranteed to have to deal with nightmare tenants at some point. Whilst the buy-to-let strategy is a safe one, the time investment it takes to manage the property and tenants alone will sometimes take away from the possibility of achieving financial freedom. There are of course landlord solicitors to help tackle such disputes, but it is vital to keep that these problems are a risk.

How Long Would Financial Freedom Take?

If you are wondering whether it is worth investing in property to achieve financial freedom, you should bear in mind that property is a long-term strategy. A lot of time, knowledge, and sweat is required to make it in property and streamline the whole process. The time frame in which it has taken others to achieve financial freedom in property is highly skewed. For example, people who can buy a few properties a year, do them up, and refinance quickly are likely to achieve freedom in a shorter time frame. When compared to a new starter who has no experience, or funding and is starting their journey with rent to rent, this may take longer as they won’t be the actual holders of the property. 

It is different for everyone, but what we do know is that you can achieve your version of financial freedom with the right education, smart decision-making, and patient time investing. Property is not a quick money scheme and anyone who suggests that it has certainly not built financial freedom.