As any experienced investor will tell you, diversification is a key factor in the creation of a long-term wealth building strategy. In the property game, diversification of location can also be referred to as ‘borderless investing’ – and it simply means spreading your portfolio across a number of locations around Australia.
With so many growth opportunities popping up all over the country at any given time, why would you limit your options to just one location or state?
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No two real estate markets are ever the same throughout Australia, with each of the states moving at different speeds along the property cycle. To add to the complexity – and the opportunity – each capital city also has their own submarkets that are experiencing different trends at any one time. Some areas may see a decline in property values, others remain stagnant, and others increase in housing values.
By investing in a city other than your own, you effectively spread your risk across multiple markets, and capitalise on growth cycles that may be stronger than your local area.
A portfolio that covers a variety of locations and a mix of property types (apartment, house, townhouse) means that if one market experiences a downturn, your portfolio will not be solely dependent on that market for growth. Instead, it will have multiple sources of income, which can help to smooth out fluctuations and ensure long-term stability.