Whether you’re a first time investor, or someone who is looking to build on existing assets, chances are that you are looking for the perfect investment strategy for you. While there is certainly no “magic bullet” in terms of investment property in Australia, there are some practical and proven ways that you can maximise your returns while minimising any potential risks.
It is natural for investors to want to focus on opportunities that they may be familiar with or have an understanding for – when it comes to real estate this may mean that they would prefer to purchase investment properties in their local area or city. For more experienced investors, they are also more likely to want to repeat any success they may have had with a certain type of property, for example, an off the plan apartment. However sticking firmly to both these strategies can severely limit your options, and the experts at property investment company Ironfish recommend that investors look at:
- Choosing properties that are geographically diverse. This means investors can pick and choose between opportunities and take advantage of local market conditions in terms of capital and rental returns. Because each state and territory has different rules about the tax levy for the unimproved land value of investment properties, buying real estate in different capital cities can also reduce your land tax burden and ensure you don’t incur a large tax bill.
- Choosing different types of properties, from houses, townhouses, units and apartments. All kinds of properties can provide different benefits for anyone interested in investment property in Australia. Buying an off the plan or brand new apartment, for example, may mean that you can benefit from high rental returns, or if you buy a house you may be looking for capital growth over the long term. Creating a property portfolio that includes different types of property can help spread any risk from a downturn in capital returns or rental income but also help you capitalise in a strong market.
Everyone wants to know when the best time to buy investment property in Australia is. In some capital cities that were entering strong growth cycles the market has now moderated, with other cities now ready to “pick up the slack”. Understanding the property cycle and knowing when and where to pick your investment opportunities is at the heart of building a sustainable portfolio. To get this kind of information investors can conduct their own research into the data behind the property market figures for each capital city, looking at both long term and short term trends. They can also talk to property investment experts such as Ironfish, who have “on the ground” teams of professionals who understand the local market and have access to prime investment opportunities, as well as a dedicated research division to give you the knowledge you need about investment property in Australia.