Property in Australia has always been a key wealth builder for Australian families and has proven to be a relatively safe investment as long as it is in the right area, has the right infrastructure around it, is professionally managed and you know in advance of the associated costs to hold it.
Property markets move in cycles, reflecting the underlying strength of the economy, political factors, demographic trends and market sentiment. That’s why its very important to have a formula that works.
Professional property investors understand that what they are really buying is time, and therefore investment property should only be considered where the investment time frame is 10-15 years or more.
This is reflected in the table below, whereby between 10 to 15 years of ownership, over 48% of investors doubled their money and after 15 years or more a staggering 95% of investors doubled their money
What makes a great investment property?
Some say its proximity to shopping centres, public transport, something with views, something in a city, a house, an apartment. What about a suburb’s past or predicted capital growth performance? What about new infrastructure in emerging suburbs?
A good location can be defined in many ways and will vary depending on whom you ask. Whilst all of these attributes are important, the main focus should be in understanding how to manage the cost of holding your property over the medium to long term.
Over longer time periods, property prices and rental demand are mainly determined by fundamentals such as jobs and infrastructure. When it comes to investing, one of your greatest allies is time. It has a moderating effect on property investing risk, and the longer you hold an investment, the more likely you are to enjoy capital growth. It’s important to get the formula right to buy enough time!