Warren Buffet, billionaire investor and co-founder of Berkshire Hathaway once said , “If you don’t find a way to make money while you sleep, you will work until you die.” Building ones investment property portfolio and generating a passive income or equity is what many Australian’s aspire to achieve. After all, property is an exceptional investment option for passive income as both rental yield and the value of your property are almost guaranteed to grow every 10 years. However, if it were so straight forward every man would be swimming in cash. It’s not just a matter of buying as many properties as possible. The key to creating wealth is to leverage on your investment. The more leverage you have, the more wealth you will be able to create. This is what makes property such a great wealth creation asset class, as it gives you much more leverage. Banks will lend you 80-90% of the purchase price. You may even be able to borrow the initial deposit if you have home equity in an existing property. In comparison, let’s look at another wealth creating asset class, shares. Borrowing money for shares is much harder. This combined with the volatility of the asset class makes it considerably more difficult to generate an income large enough to become financially free. When it comes to property, your borrowing capacity, combined with your willingness to take on good debt and put in time to do property research, will be key to achieving your financial goals. If you purchase a property that is self-funding from day one, all of the equity growth is yours, without any of the holding costs. Now this all sounds amazing, so what is the catch? Ian Hosking Richards, an experienced investor, and founder of Rocket Property group says, “Rather than a catch, let’s call it an obstacle to overcome. The reality is that if you are highly leveraged, you are inevitably taking on significant debt,” he says. Taking on significant debt may be what scared people away, however it’s important to understand all debt isn’t necessarily bad, when leveraged correctly with good debt such as that derived from a home loan, it can form the building blocks of your wealth creation journey. To understand how you can effectively grow your passive income by investing your money successfully, contact Richman Property Investors for a free one-on-one strategy and advisory consultation.