Property values have commonly doubled in every decade over the last fifty years. Residential property is an asset for those with a mid to long-term investment strategy. The residential property cycle is generally a period of 7 – 10 years and as a property investor you should have a specific aim of creating a positive cash flow from your investment property within that period.
Investing in property means that you start with what is right for you, this could mean that your initial purchase is an entry level, tenanted townhouse used as stepping stone to accumulating wealth so that you can ultimately buy your dream home in retirement or sooner.
The government has continually supported the property investor via tax incentives. Investing in real estate will give you access to these tax benefits plus the capital growth associated with long term and well considered property ownership.
Property can also be less volatile than some alternative investment strategy and tends to be considered a safe haven for investors when other assets don’t perform. For many, property is also a tangible investment – it is an asset that you can see and touch. Property investors often look forward to an earlier or wealthier retirement and it is never too late to begin.
Whichever stage of life you are in, property has both the flexibility and wealth-building power to provide a rewarding and secure retirement.
Finding an investment property
In selecting an investment property it is critical that you follow a strict due diligence process to ensure an effective investment strategy. Condensed from our detailed checklist, investigations must include research into the following:
- Location – look at where people want to rent
- Value for money –
- Infrastructure
- Rental return
- Design and finishes
- Quality and integrity of the builder / developer
- Correct legal structure
- Finance
Successful property investment requires that you understand all these factors and how they combine to make your property a valuable investment.
The Sunshine Coast ticks all of the required boxes for location, value for money, infrastructure, and rental return. With land on the Sunshine Coast being a high commodity, investing here is a safe and secure option for investors. The economy of the Sunshine Coast is progresses well as a result of massive infrastructure development that is currently happening and planned over the coming 10 years. With the Sunshine Coast University Hospital, Town Centre in Maroochydore and the expansion of the Sunshine Coast airport, property prices are on the increase as the population of the Coast rises.
Investing in property has many options available to you however one of the best strategies to consider is to purchase a house and land package.
Why???
Benefits to purchasing a house and land package are the following: These can save you thousands.
- Opportunity to customise the build in regard to fit and finishes and also your budget
- The purchase of just the land initially means that you will only pay stamp duty on that amount, not paying the stamp duty on the total cost of the complete property.
- Depreciation of the property which is maximised on the internal fixtures and fittings and building costs.
- Purchasing new means that you should have no (or very little) maintenance costs for the first 5 – 8 years.
- If you get in early (in the first stages of a new development) then by the time the estate is in full swing land prices are already increasing which ultimately provide you with equity.
There are several ways that you can consider to jump into the property investment ladder.
- Equity. Refinance your home to pull the equity out for the deposit
- Cash deposit from savings
While this is an initial upfront cost, if you secure a neutrally geared or positively geared investment property, there should be very little more that you would need to invest into the house.
If you follow the 8 rules outlined above you will secure yourself an investment property that sustains itself – the renters ultimately pay the mortgage and any other costs involved.
Ultimately, when you think about it, you cannot save yourself rich or for a secure retainment on a job that pays by the hour. You need to make money while you sleep and property investment provides this avenue to you.
The team at Green Earth Homes have been specifically selected for their extensive experience and passion for property investment.
Call our team today and begin your property investment portfolio on the Sunshine Coast.
