Residential Property is a Proven Asset That Generates Long-Term
The most obvious reason to invest in property is its track record of solid capital growth. You won’t see dramatic overnight changes in your
investment portfolio – that would be the share market. You won’t see your savings reduce in real terms – that would be bank accounts
and term deposits. You certainly won’t need to worry about superannuation taxes and excess contributions.
Property is a unique asset that appreciates over time. The real estate market has proved to be stable over the long term,
even after significant global events.
If you look at the results others have achieved, you have to say that property makes pretty good investment sense. According to the BRW Rich 200 list, which is published each year, the property has consistently been the major source of wealth for Australia’s multimillionaires. And it’s the same all over the world. Those that haven’t made their money out of property generally invest their money in real estate.
Remember, there’s nothing wrong with seeing what successful people do and applying those principles to your own life. If the majority of extraordinarily wealthy people have used real estate profitably, it stands to reason that there’s money to be made in this sector.
Anyone Can Do It
Property investment is not just for the wealthy. It doesn’t really take large sums of money to get involved in real estate. This is because banks will lend up to 95% and sometimes even 100% against the security of residential property, which means that most Australians with a steady job and a little capital behind them can afford to buy investment properties. It has been shown over and over again that careful and intelligent use of real estate can enable ordinary Australians, like you and me, to become property millionaires in about 10 years. If you truly intend to become one of the wealthy people in the future, you should probably take a serious look at using the property to your advantage. Those that haven’t made their money out of property generally invest their money in real estate. Remember, there’s nothing wrong with seeing what successful people do and applying those principles to your own life. If the majority of extraordinarily wealthy people have used real estate profitably, it stands to reason that there’s money to be made in this sector.
It’s often said that residential real estate offers the security of “bricks and mortar”, but let’s take a closer look at why I believe it’s one of the safest and potentially most profitable investment markets in Australia. You never hear of houses going broke, do you? But lots of companies have gone broke. Even companies previously considered as blue-chip companies have gone broke.
Yet even allowing for the ups and downs of real estate values that we hear about, the underlying trend of property prices in the major capital city residential markets has been steady growth.
Investing in property is simpler than you think
The amount of paperwork you need to produce and information you need to assimilate can be daunting at first, but the investment process in itself is remarkably simple. There are no complicated steps you need to take. As long as you’ve got your finances sorted out, you can start doing your research to find the right property.
If you apply thorough due diligence in terms of getting inspection and valuation, there’s little risk for you to overpay or buy a dud property.
You have stability
Real estate is less volatile than stocks or mutual funds, especially in uncertain economic times. The continuing demand for housing fuelled by strong population growth ensures property prices are supported in general.
It’s also worth noting that the price drops most people fear are NOT real losses until you actually sell the property. If the property was purchased correctly and generates a healthy cash flow, the investment can be sustained until the price gets back up again.
BUT NOT JUST ANY PROPERTY…
Not all properties are created equal. The skill is in knowing which property to invest in, when and at what price. This is where you need the right partner.