Is successful property investing an art or a science?

Albert Einstein once said, “COMPOUND INTEREST IS THE EIGHTH wonder of the world.

He who understands it earns it… he who doesn’t… pays it.”

If we accept the above, then the longer we hold a property investment the more likely we are to make a gain.

As professional investors, we should be looking for a property that outperforms the average, as even a small gain above the average can create significantly different results.

Buying rights also adds to risk minimisation.

For example, the following table shows how the value of a $500,000 property may differ depending on growth over time and highlights the significant difference that even a two per cent per annum growth rate can make over 20 years.

This chart demonstrates “compounding growth”  (compounding interest)at work regardless of the growth rate the compounding effect continues.

Extract Thanks to propertyupdate.com.au