Property Investment Strategies
Property Investment Strategies broken down. What you need to know before you make your next move.
Strategy 1: Go For Cash Flow
A technique highly favoured by beginner investors, or perhaps those with a more modest income, is the cash flow strategy. The plan here is to invest in a second property where the rental return is higher than the cost of the mortgage repayments, so you have a bit of extra cash to stow away or reinvest in something else. With this plan, you will also be better off in an economic downturn, because as long as the rental income still covers the mortgage repayments, you don't have to stress about selling in a hurry.
Strategy 2: Play The Waiting Game
A more long-term way to invest, is to choose an investment property with foreseeable capital growth. Perhaps an area which is on the verge of an upturn, or an already established, desirable suburb. Things to consider with this are if your new property is close to desirable amenities such as shops, parks and schools? It may not matter to you in the short term, but keep it in mind as this will increase the value of the property if you are thinking about selling or refinancing down the track.
When you're not so keen on having the burden of a second property and would prefer to focus on paying off your current mortgage, (sourcing tenants and regular maintenance aren't your thing!) this is a similar tactic to the waiting game, except you are actually living in the property. Here you should aim to buy a property when the market is at a low, then sell at the peak. The downside to house-hopping? You may have to rent or stay with family between homes.
Strategy 4: Renovate Away
So you've found a decent sized block in an area you like, however the property on it is a bit of a doer-upper. The upside here is you can add instant value to a property by renovating it, even when the market is stagnate. However, you will have to do your research, budget correctly and be prepared to put in the hard yards to polish that diamond.
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Note: The above information is not intended to be, and should not be relied upon as advice but rather an example of some of the many approaches to property acquisition. For more information best suited to your needs, we recommend you speak with a financial or other appropriately qualified advisor who can provide advice which take into account your objectives, financial situation or needs. Mirvac disclaim all and any guarantees, undertakings and warranties, expressed or implied, and shall not be liable for any loss or damage whatsoever (including human or computer error, negligent or otherwise, or incidental or consequential loss or damage) arising out of or in connection with any use or reliance on the information on this site. The user must accept sole responsibility associated with the use of the material on this site, irrespective of the purpose for which such use or results are applied. The information on this website is not a substitute for financial advice.
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Artwork: ‘Reimagining Country’, created by Riki Salam (Mualgal, Kaurareg, Kuku Yalanji) of We are 27 Creative.