There’s some tempting headlines being touted at the moment. “Sydney Investors to see strong returns”, “Flats and townhouses a better investment than stocks”, “Buyer’s market as auction sales slow” to name a few.
So why invest in real estate?
The two reasons for investing in real estate should be capital growth - the amount by which a property goes up in value, and return - the amount you receive while you own a property.
Is it a good time to invest in residential property?
Anyone who says real estate always goes up does not know much about real estate.
The whole purpose of investing is to give you more security. If the price is right, if the sums stack up, if you like the location and the property , then buy!
Who actually buys residential property?
Of course there is the home-owner who in most cases, the purchase constitutes the largest financial commitment of a lifetime, and typically represents a huge percentage of their net wealth. Then we have the investor and residential property has been a highly favourable option given the solid level of growth in median value over the medium to long term.
How can you be safe when investing?
Always check the past capital growth of a property with similar properties in the same location.
You should seek a return of at least 6% gross. Yes areas that show lower capital growth have higher return and areas that show higher capital growth can be lower but the more the rent covers the mortgage payments, rates, insurance, maintenance costs, agents fees and a vacancy allowance, the safer you will be.
The location factor is important, but not nearly as important as the price, a history of capital growth and a good return.
Watch out for Investment Scams
Often referred to as, “Two-Tier Marketing” meaning there is one price for locals and one price for people who are not locals - the prices of the properties are “loaded” by tens of thousands of dollars above their true value.
Despite massive amounts of bad publicity, people are still being conned by the Get-Rich-Quick Property Marketers.
There are some appealing residential properties available for sale. By doing some homework and being careful where you buy and how you buy, investing in real estate will be a wonderful and rewarding experience and you will be safe and secure– Just like bricks and mortar.
History has shown that properties that seem expensive today will seem cheap tomorrow.
Talk to us today about buying a residential investment property. You may not get rich overnight but we will help you find a safe and secure one with good steady growth and return.