As with any wealth creation strategy, there are no guarantees, but with a clear goal and the right approach, property investment could be your smartest choice
It’s well known – including outside this country – that Australians have a passion for real estate.
Property investment is today the most popular long-term investment strategy in Australia, and you don’t have to look far to see why.
A booming resources and mining sector, tight rental vacancy rates and a growing population continue to ensure there are plenty of opportunities for savvy investors – so long as you know what you are looking for.
You may have heard of ‘Uncle John’? He made a fortune by building his property portfolio and now sits back and reaps the rewards of strong capital growth and rental returns.
But don’t be deceived by Uncle John’s story. Property investment is a long-haul strategy and not something to be undertaken without the proper research, planning and professional advice.
The good old days of guaranteed price growth are all but gone, but that is not to say that creating a profitable portfolio is no longer a powerful wealth creation tool.
With the right approach and strategy, you too can find that gold nugget in the property market.
Building your knowledge and understanding of property as an investment will go a long way towards helping you succeed, while minimising the risks that are inevitably present, based on the steps you take.
1. Research is the single most important factor in successful property investment and as an investor you will need to know how your prospective market is performing and what opportunities are available. This is why it pays to seek the advice and assistance of a professional prior to making any investment decisions.
2. Building a solid investment team should be your first objective. A trusted mortgage broker can assist with funding your dream, while a proven buyer’s agent or real estate professional can help you make the right decision when selecting a property.
3. With a solid team in place, you will now need to assess the strength of your current financial status. It is also important to factor in any changes that may alter it. Do you see children on the horizon, are you considering marriage, do you expect to come into some money or are you simply looking for a career (or salary) change?
4. Finally, you will need to develop a clear idea of what wish to achieve from your investment. Some investors choose to take a long-term approach, purchasing a property based on the prospect of strong capital growth. Others will opt for a stable cash positive investment, where minimum maintenance costs are required and weekly rental returns outweigh any loan repayment fees.