The concept of leverage is not new. Basically it revolves around repetitive use of a singular system to produce again and again for what essentially started out as a one off profit. In its simplest form we leverage our abilities as a human body when we repeat over and over the same process to get a result – eg. Digging a drain with a shovel. The process is repeated over and over until we get the job done. Now, apply this to money, and especially to land and houses and you will soon see how you can create wealth by leveraging properties.

Start first by forming what is called an LAQC or a Loss Attributing Qualifying Company. Now, to do this you will need to go and get an accountant. Don't worry, their fees will be reimbursed through the tax system. It costs about $250.00 to set up an LAQC and, essentially it is what we call a shelf company, meaning that there is no real business and the business is simply a file sitting on your accountants shelf.

Once you have formed an LAQC then go and purchase a house, for as little money down as absolutely possible. You will see why in a minute. You will be looking for a cheap house, something you can still get market rent for but which hasn't got a high price tag

Now, here is the scoop. What you do is this. You get tenants in ASAP. The tenant is then instantly starting to help you service the mortgage. You then spend as much money as you possibly can in doing the property up. At this stage you are thinking I am mad but here is why you do this. Everything you spend on this house is considered a business expense. Because the house belongs to the LAQC you started it is considered a business asset.

Now, if you spend, say, $40,000 doing this house up, with a new drive, wall paper, paint clothes line, letterbox, range, bathroom, garage etc then you will pay $40,000 less in tax. But here is the good bit. You then go and claim depreciation on the building, plus everything you spent, to the tune of at least 14%. So the equation looks something like this:

$200,000 for the house plus $40,000 spent = $240,000. x 0.14 (%)

= $33,600 claimed as depreciation.

What happens then, approximately 8 months after you started with your first house is you go and get it revalued, at $40 - $80,000 higher than what you paid for it. You then take out another mortgage, based on the new equity. This is usually enough to go and buy another house with, and repeat (leverage) the same system again.

Do this 5 times in 5 years and you should be well on your way to having oer a million dollars in property that everyone else (your tenants and the tax department) are paying for. Honestly, as far as business systems go this one takes the cake. You seldom, if ever lose on property. Why? Because it is a limited resource.

As such it is always worth more and more as the resources get slowly depleted. If you haven't got the money to start doing this then simply find a free, or low cost, business system to implement and get started with. As soon as you have enough deposit for a house you will be on your way.

You don't need to have a lot to start out. In fact you don't even need to spend anything on your property. Just buy one and it will increase automatically at an average rate of 6% every year. If it is tenanted then your tenants can pay your mortgage off for you

By: Keith Roberts

Article Directory: http://www.articledashboard.com

Do you want to learn more about how to succeed in becoming wealthy ways to make money? To download Your Free Copy of my latest eBook, click here "Easy Profits With eBay Wealth Creation" "www.secretsofwealthsuccess.com" Keith Roberts has been working in the field of wealth creation for nearly ten years and has written 7 books