ASK53: What is the snowball effect?

This week on Ask Rob & Rob, Charles... Asks Rob & Rob – What is the snowball effect? Rob B says that from a capital growth point of view, if you see your portfolio at the top of the hill, as the hill drops down that represents time, by the time your snowball has been pushed down the hill - it is bigger. The point being, if you do more work in the early stages (buying BMV), your 'snowball' will be bigger at the end. The first few properties are incredibly important and you need to make wise decisions.  Rob D adds that when he thinks about the snowball effect, he thinks of compounding rent. For example, if you want to buy a property every year worth around 80K, with a 75% mortgage and cash for the rest, you would need to save 20k+ (with fees) to buy that property which for most people is a very big ask. But once you have your first property and it's making you money, if you don't touch that rent, you need to save less to put the deposit down on your next property - and if you keep doing that, you reach a stage where you can keep buying through rental income alone. Saving for the first two or three properties is sometimes a slog, but it doesn't take too long for your 'snowball' to take effect and make life a lot easier.  ASK YOUR OWN QUESTION TO ROB & ROB! Don't be shy! All you need to do is leave a message with your name and whatever's on your mind. Just pick up the phone and call 013 808 00035 (normal UK call rates apply). Or if you prefer, click here to leave a recording via your computer instead. NEED MORE ANSWERS? The Property Hub Summit is the place to get all your questions personally answered by Rob & Rob, and build a network of other smart, motivated investors. Over the course of a full day at a swanky hotel we'll help you set your goals, form a plan to get you there, overcome your obstacles, and give you the support system you need to make sure nothing gets in your way. Just don't hang around - there are only four Summits each year, and just 16 places available at each! Interested? Click here to find out more. See omnystudio.com/listener for privacy information.