Australia is still one of the worlds strongest and more robust real estate ownership nations in the world.
But we will first have a quick look at levels of property investment in Australia using data from RP Data as well as the census.
We can see 72.8% of 1.7 million people own just one house(their own home) and 5.75% of the Australian population own at least one investment property.
18% of investors and 1.42% of our population owned two properties whilst 5.5% of investors or approximately 0.43% of Australians owned three properties.
We then notice 0.16% of Australians owned four investment properties with 0.8% of investors/ 0.065% of us owning five investments.
Which leaves us with 0.9% of investors and 0.068% owning six or more investment properties.
Many first time property investors are using the “reinvesting” model which is based around the simple premise of renting where you want to live but cannot afford to buy right now, and investing in desirable and high return areas, primarily outside of Sydney.
Reinvesting can can be a great way of building some form of equity in order to become a homeowner at some stage in the future !
The economic as well as political stability Australia has, combined with consistent capital growth,high migration and the tax benefits associated with owning an investment property, make investing using real estate, a very popular investment choice.
For the last forty years or more, property investment in Australia has had very steady returns and is rated as a form of positive risk asset by most lenders.
Of course making well-researched decisions about the price you pay and the type of real estate you choose will have the biggest impact on your investment’s returns.
But what are the possible problems first time property investors might encounter ?
Due diligence in research.
We specialise in off the plan investment properties all over Australia.
But often, investors would prefer a pre-existing home.
Sometimes knowing the vendor’s motivation can make a big difference when it comes to negotiating the best price for yourself.
The vendor’s personal financial situation might allow you some leverage in negotiations.
This does sound heartless but this is how the business world operates.
Were all the relevant inspections done to uncover any structural defects, and especially signs of pest infestations ?
And homes near bush will tend to attract termites.
Any fees incurred for this are tax deductible and paying between $500-$1000 for this type of peace of mind can save you thousands in the long term.
Is the property in a decent location, with a high percentage of owner occupiers ?
What sort of regional infrastructure is being built in the area or even is pre-existing ?
Patience rather than mindless speculation.
Due to social media, most ? (some)people get into property investment hoping to become overnight millionaires.
Because thats the story the media pushes.
Sure it sells stories, but its not very likely or realistic is it ?
Some appear to believe property will be a quick fix to their financial problems, but the truth is seeking short term gains in real estate is more about speculation than strategic investing.
The major reason that simple bricks and mortar is a brilliant long term form of wealth creation is that it lacks the liquidity and hence the volatility we see in other classes, like shares.
Emotions leading the mind.
Yes, we all love to believe our life and decision making is governed by our critical faculties rather than our emotions.
But study after study shows the reverse is true.
We now know that the majority of your purchasing decisions will be based on emotions and only about 10% will be on logic.
Forget the parameters of shopping for a family home with the white picket fence.
This mindset is perfect for somewhere you will raise a family.
But an investment property is just that.
It does not matter what the decor is like etc.
What does matter is a consistent return.
Plan, then plan some more.
Trying to build a long term and stable property portfolio without a plan of attack is like setting out on a road trip without any form of maps.
Successful wealth creation through real estate requires you to set goals and plan on where you want to end up, and when !
Work out what you want to achieve with regard to income – are you chasing short term yields or long term capital growth – and how you can best manage your cashflow as a smart investor.
What type of property do you need to buy in order to meet your long term income goals?
With a carefully thought out and thorough outline of your investment journey, you will end up exactly where you want to be.
So as the mighty S.G Lawson said “plan your action and then action your plan”.
At Ample Property Solutions we specialise in first time property investors !
We take out the mind numbing and often tedious research and show you how, where and when you can invest following our 7 Step Personalised Freedom Plan.
Why not contact us for a free chat and see what we can do to help you TODAY !
First Time Property Investors