For many Australians, when it comes to building wealth and achieving financial freedom, property investing generally stands above all else as the best way to make their dreams a reality.
And when we take a closer look, this makes sense.
Over the past 50+ years, the Australian property market has proven time and time again that it’s capable of delivering substantial returns for savvy investors.
Of course, as with most wealth creation strategies, there are several factors that heavily influence your ability to make the right decisions so you can achieve your financial goals.
That’s why, in this article, we’re going to offer key insights and expert advice to help you navigate the complexities of the Australian investment property market, such as:
- how to conduct market research, and
- what to look out for when searching for a great investment property.
In doing so, we hope to provide you with some of the best investment property tips in Australia and a clear understanding of how you can make smart investment decisions that steer you towards complete financial freedom.
Let’s get started.
Understanding the Australian property market
It goes without saying that, to be able to achieve success in the Australian property market, you first need to have a fundamental understanding of how it works – including the various property trends and external dynamics that play a role in its movement.
For example, factors such as rising interest rates, economic growth and new government legislation can all heavily influence the market landscape from day to day.
As a smart investor, it’s important to understand and stay up to date with Australian property trends, especially as they shift and change over time, so you can recognise opportunities as they arise – as well as the risks that may come into play at different points along your property investing journey.
Of course, the best way to understand and stay informed about the Australian real estate market is to conduct research.
How to research the property market in Australia
Effective research forms a crucial part of your property investing journey, helping you to make well-informed and smart investment decisions that move you closer to achieving your financial goals.
Let’s consider some of the many ways you can conduct research to learn about the Australian property market:
- Stay informed with the latest local and national news regarding the state of the economy. This is where you’ll typically find indicators of what may happen with property prices over the short and long term.
- Read market news and reports to help identify trends and gain a better understanding of what’s to come for the property market in Australia over time.
- Speak with relevant experts to get their take on the current situation, gather property investment advice and expand your knowledge on the subject.
- Take a deep dive into prospective neighbourhoods to gather as much information as you can on things like safety, the quality and proximity of amenities, and the growth potential.
- Attend property inspections to help build your knowledge of what’s available, what to look for and what other investors might be doing as well.
What to look for in an investment property?
There are several elements to look at that can help you put together a complete picture of the potential of an investment in the Australian property market.
Let’s run through the most important ones in more detail:
Property type
Many new investors often ask, “What type of investment property makes the most money?” But the truth is, it’s not always that simple.
Different properties each have different advantages and points of appeal. Be it a house, an apartment or a townhouse, it’s best to focus on finding the right property type to meet your individual investment goals.
Property condition
Always consider the condition of a property. Is it new? Is it old? Does it need work?
You may be happy to do a few renovations, but you don’t want to find yourself stuck with an investment property that requires constant maintenance and upkeep and is forever eating into your rental income.
Capital growth / rental yield potential
Understanding a property’s potential for long-term capital growth, as well as rental income, is one of the keys to landing the right property for your portfolio.
Again, this will depend on your individual goals, whether you’re looking for immediate income, or you’re in it for the long haul – or both.
Location and surrounding area
Do your due diligence on the location of your prospective investment property.
Consider factors such as the current demographic, infrastructure, proximity to amenities, job opportunities and plans for future developments. If the area appears as if it’s growing, that’s typically a good sign that the demand for rental properties will be strong over the long term.
How much do you need for an investment property in Australia?
Like most questions related to the Australian property market, the answer depends on a variety of factors.
First and foremost, the value of the property you’re looking at will heavily influence how much you need for a deposit.
As a general rule, most lenders require 20% of the property’s value as a deposit.
While some may accept less, you will likely have to pay a premium for Lender’s Mortgage Insurance (LMI) to cover the lender in case you default on your loan. You’ll also possibly find yourself subject to higher interest rates and stricter conditions on your investment property financing.
Other property-related costs to consider
It’s also important to factor in other costs outside of your deposit, such as stamp duty, legal fees, building reports and so on. You’ll also have to pay ongoing maintenance costs, property management fees, insurance premiums, council rates and more once you own the property as well.
The best thing you can do here is sit down and draw up a budget, factoring in every single cost of owning an investment property, to determine exactly how much you’re going to need before moving forward.
What’s the best way to succeed in property investment?
In a nutshell, achieving success in property investing comes down to having a clear and deep understanding of the Australian real estate market, doing your research and due diligence, and ensuring you’re financially ready to take the next step.
Once you’ve started building your portfolio, it’s about devising the right property strategies, such as leveraging equity or rentvesting, to help you maximise your returns and reduce your exposure to market risks so you can reach your investment goals sooner and enjoy your financial freedom.
Of course, everything in this article is general property investment advice only. If you’re looking for individualised help and support from the experts, we’re here for you.
Are you looking for guidance to make smart investments in the Australian property market?
At inSynergy, our expert team is here to help you.
inSynergy is a full-service and specialist Property Investment Advisory firm dedicated to helping you learn how to use property investment and finance as a tool to build a more secure future.
We provide our clients with a broad range of professional services designed to assist with all aspects of property investment, including property investment education, property investment strategy, finance and mortgage broking, and sourcing high-growth investment properties.
Through every interaction with you, our focus is on helping you to safely build a successful property portfolio and achieve your financial goals without sacrificing your lifestyle.
Get in touch with us today to discover how inSynergy can help you on your investment journey.
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Please note, that this article and the information in it is general and not to be considered as financial advice. However, you can book a meeting with us for personalised advice tailored specifically to you.