Property Investment Advice

Statistics claim that around 500,000 properties, mostly residential, show a change in ownership in Australia every single year.

The basic idea of most of these purchases or sales are just to make buyers and sellers trot from one home to another. Some investors however, make huge profits with these transactions.

Adding commercial property to the mixture turns a plain market into an investment market blooming with potential. Make sure to read the entire page to gain essential knowledge if you are considering buying any sort of investment property here, in Australia.

Everything you need to know about investment property is covered below-

• What exactly is investment property?
•  Benefits of investment property
•  Types of investment property
•  Australian market
•  Investing in property on a small scale

What exactly is investment property?

In basic terms, investment property means oppose or any commercial building that you buy with the only intention of gaining profit. Even if this sounds just like a simple, small difference from regular property, this difference throws light upon a lot of important points.

There are several ways of making profit on property. 

The most classic strategy used for property investment and also the one in which least labour is required is speculation. Speculation involves buying property at a certain price hoping that its value is going to increase and as and when this happens, it is sold at a higher price and the profit is gained.

Another simple strategy is buying property with a view of renting it to someone else. Being very self-explanatory, in this strategy you buy buildings and give them out on lease or rent them to required tenants and make returns from their monthly or periodical rent payments. When compared to speculation, this obviously is a strategy that gives slower profit but at least this strategy is not completely reliable on the market and is much more stable which is an advantage as the market is extremely volatile. You also don’t have to wait for years for your first income.

You can choose either of the above Strategies and the strategy that you adopt will basically depend on the risk you are willing to take and the amount of time you are ready to spend on a particular property after you invest.

Benefits of investment property

There are several ways of investing your money and why property investment you may ask. We can clear this out for you by letting you know that the chief advantage of investing in property is the amount of security this option gives.

This is one option which will always have interested customers as people will never not need places for work and residence. No matter how frequently property prices may boom or fall, the basic value of the building or land very rarely changes. 

For example –  Just in case you invested in stocks, there is a huge chance that you can use all your investment overnight if you make a wrong decision. But this is not the case with investing in property.

Even if you consider the effects of inflation, the prices of property always tend to increase steadily with time so that you are protected from any negative effects of inflation. So if you are looking for a long term investment, property investment is the ideal option for you.

Types of investment property

If you are a new investor in investment property, it is important for you to consider whether you are investing in residential or commercial property. 

Residential property basically means an apartment or a house for people to live. Commercial property is any land of building that the person who occupies it will use for business purposes. A huge advantage of commercial property for people like landlords is the wait is treated in contract law.

There can be quite some havocs when it comes to commercial property as business owners are always presumed to have  some sort of an attitude about their professional affairs which makes the court merciless when they come to breach lease terms. However, residential property is easier to manage compared to this.

Most oftenly, commercial property has a lot of special requirements especially when it comes to larger businesses. These businesses can be demanding for people to live there, as their income is strongly dependent on how suitable their premise is.

If you are a small investor, commercial property can also turn out to be a lot more expensive to purchase.

Australian market

If you are specifically looking to learn about property investment in Australia, then you are in for a treat. As property investment in this country has its own quirks. Most important the property prices in the form of a percentage of the average income is higher compared to other developed Nations.

You are an investor, this necessarily is not a bad thing. Big investment cause for big Returns.

As for the depression period, history confirms that the property market in Australia has been resistant to numerous economic shocks like the dotcom Bubble Burst, the recession in the year 2008 and also the mining boom end in 2014 did not result in any major setbacks.

Investing in property on a small scale

If you want to enter the investment property market, it’s not necessary for you to have the resources to outrightly buy a property. there are ways in which you can enter the market without even doing so.

One of the most easy options is syndication. Syndication as the word Syndicate says, it is a group. You can group or team up with work colleagues or even family members to purchase a particular property by splitting the returns and the costs equally or in accordance to the number of shares.

If possible, you can also get yourself a property manager in case you are planning to rent out the investment property. The manager can look after the maintenance of the property and interact with your potential tenants so that you are free to just watch the money come in when concentrating on other things.

In case you do not want to team up or if you do not have the people around you in a position to syndicate, you can always look into a property investment fund. These are basically capital market instruments. You can pool your funds into this and fund managers then collect the entire Pool and push them towards various property investments and divide The returns among you investors.

This sounds like a great option if you already have a few thousand Dollars to start with.

For Australians, property investment is a stable and reliable option as its future in the market of Australia is very bright in 2020.

If you’re in Sydney, Melbourne, Perth, Darwin, Brisbane, Adelaide, Hobart, Gold Coast, Newcastle, or Canberra, and you’d like to know more about how to plan for your retirement, please get in contact.