Choosing an investment property in Australia
Choosing an investment property in Australia
With the Sydney property market continuing the upward trend, investment properties are generally considered a good move by most analysts but firstly, you need to understand what makes a good property investment and understand the importance of choosing the right property.
A review by the Australian Housing and Urban Research Institute found that suburbs situated within 5 to 15 km of the CBD consistently see a level of capital growth that outperforms suburbs. The reasons include
- They are close to employment hubs.
- The have a better range of transport options
- They offer a desirable city lifestyle.
- There is no further land available for release, keeping supply in check and demand high.
There are a few ways to profit from investment in property including
Capital Growth – to building yourself a solid asset base a property needs to appreciate in value at above average capital growth. This comes from strong demand from owner occupiers and tenants (who help you pay your mortgage.)
Cash Flow – the rent you receive.
Tax benefits –a good tax strategy can help you manage your cash flow, decrease your tax obligations and increase your bottom line.
Accelerated Growth – by investing in a property that requires a bit of cosmetic makeover through renovation or perhaps property development
Some of the major drivers of this type of capital growth are:
- Proximity to the city
- Proximity to the sea
- Adjacent to a prime suburb
- Amenities’ such as proximity to a large shopping centre, train station, or within the zone of a highly sought after public high school.
- Suburbs that contain period style homes rather than newly built properties.
Although there has been much talk of a housing bubble due to the speed that house prices have increased in the last ten years, there are still many reasons why making a long-term property investment in Australian can build your overall wealth. Investments in property provide a higher than average return than many other asset types in Australia. Thanks to the increasing population and declining household size Investment property in Australia has enjoyed a strong average annual growth rate and future demand is certain. The demand for housing will only increase with an additional 600,000 households required across the country by the year 2030. This alone should ensure real estate prices increase, while our changing demographics will ensure a steady stream of tenants in the future. Make sure you conduct a thorough home inspection and ensure the building and pest inspections are done by a professional building inspectors prior to purchase.