This is a question that comes up from time to time and the better question is, what property investment is going to give me the better return in the long run and have the lowest holding costs? This is the better question to ask, regardless of the kind of property you’re looking to invest in.
Australia’s retirement system is known to be among the best in the world. With the government’s age pension and mandatory “Superannuation Guarantee” programs from employers, it has far exceeded other industrial nations like the United States when it comes to high individual savings rate.
Many clients come to see us with the idea that they can make money from property, but they don’t really understand how. If you know the formula, and you get it right, then it’s relatively easy to make money through property investment and often it doesn’t cost very much to do so.
How is that possible? How can you grow your wealth with little initial outlay?
Did you know?
70% of Australian retirees rely on Government subsidies or are living below the poverty line.
I know I do not want to be part of this statistic, living on less than $300 per week (the Australian Aged Pension per couple).
So… what is the solution?
But I know Sydney…
This is one of the statements we hear most often at Calla Property when we first talk to clients about property investment.
Clients often feel that they know the city and even suburb they live in or have invested in in the past. Usually this is because they’ve done quite well, either through good timing or holding the property for long enough. Often this is reason enough for the client to want to invest in the same area again.
What is a positive cashflow investment property and is it worth seeking out?
Simply put, a positive cashflow investment property means that the income received from the investment from rent outweighs all expenses associated with the ongoing cost of the property. So the rent received from the property is more than all costs, such as agency fees, strata or body corporate, if it’s an apartment, council and utilities if it’s a house, mortgage repayments and repairs or maintenance of the property.
New or Old? What is the better investment?
Many of our clients want to know whether it’s better to buy an old property – or second hand property or a new property.
There were reports last night that the Sydney property market is starting to slow down as we finish another weekend that resulted in lower clearance rates with the average of around 70% instead of 80%. There were also reports from auctioneers and real estate professionals that bidders seemed less bullish.
I’ve had many clients ask me about recent changes to banking policy in regards to Investment Loans. The APRA decisions are interesting. In my view they’re trying to find a way to counteract the property heating effect that the RBA rate cuts are having in Sydney.
A housing bubble is a period of rapid growth in property prices, followed by a drop in prices back to the original point. For example if the market started at $300 000 and inflated rapidly and unexpectedly to $600 000, then fell over time to the $300 000 mark or below, this cycle could be termed a ‘Housing Bubble’.