6 Main Tips to Follow When Investing in Australian Property

Over the last couple of years, the Australian real estate market experienced a fair share of its ups and downs, most of which were closely related to the development of the global COVID-19 crisis and its tribulations. These days, however, when this situation is under control again, the Australian housing market once again experiences sustainable growth soaring to a total worth of $10 trillion for the first time in history.

So, if you are an investor looking for a lucrative and sustainable long-term option this is definitely the alternative you should consider.

However, favorable opportunities seldom make instant success. Let us take a look then at a couple of tips that should help you turn these odds to your advantage and develop the investment strategy that will produce tangible results and make your money’s worth.

Keep in mind all pros and cons

As we mentioned in the introduction, the Australian property market makes an incredibly lucrative investment option. But, despite this inherent pertinence, the real estate market also features other inherent traits you need to take into consideration before finally expanding your portfolio. So, let's quickly break these things down for you:

Pros

• Long-term price growth

• A good option for establishing secondary income

• Excellent asset security

• Different tax benefits

Cons

• Not a liquid investment

• The investment is exposed to market interest rates

• The market is open to situational vulnerabilities like COVID-19

As long as you are aware of these traits and work them into your investment strategy, you should be fine.

Develop an investment strategy

Every endeavor is much easier to pull through if you have a clear set of objectives you can work toward. In order to get to these specific short-term objectives you first need to develop a long-term investment strategy that will outline the pace of your future moves and the returns, you are going to make. The three most common options you have on disposal are as follows:

• Buy and hold – In this scenario, you will buy a property, wait for the value to increase, and sell while the interim expenses are covered by rents.

• Renovate and then add value – This so-called flipping was can prove to be incredibly valuable if you put your money in the right basket.

• Focusing on capital growth – In this case, the investors will focus on the properties in the location that is expected to grow in value as time goes by.

Pick the right property

Once you get through the previous considerations, you should start thinking about the more immediate moves and focus on getting the property that will meet the outlined in the previous sections. No matter whether you are an Australian native or you are coming from abroad this is the instance where you should contact a local professional for help. We are talking about the people with enough clout like, for instance experienced property professionals that could leverage personal influence to dig out the prospective real estates that don’t necessarily register on the mainstream radar. When it comes to signing on the dotted line, pre-purchase building inspections are a must to ensure you are not investing in a money pit. 

Take into consideration ancillary costs

This may seem like a relatively insignificant point but these hidden costs are more than the present and when they stack up they can produce considerable expenses and completely derail your investment strategy. Most of these costs are ongoing so they will affect your earnings for quite some time so be sure to keep them under close scrutiny. Here are some of the most critical mentions:

• Water rates

• Strata fees

• Repairs and maintenance costs

• Management fees

• Insurance costs

• Land tax

• Council rates

• Vacancy costs

• Advertisement costs

Make your property attractive to renters and buyers

Even if your strategy isn't built around flipping, you must ensure your investments are drawing enough attention and have a fair chance of standing toe to toe with the completion. So, don't be afraid to make some investments that will generate sufficient ROI and maximize the selling or renting price. Usually, most of the buyers tend to give most attention to areas like the bathroom or kitchen, but you can summon a lot of goodwill even if you make your property more presentable and pull a couple of heartstrings with adequate styling, interior or retro decoration, driving the vintage vibe or brightening the things up.

Minimize the risk

Last but not least, we would like to point out that even the investments that look the most promising on paper can turn out to be horrible misfires if the market conditions don't align with your expectations. Do your best then to nerf your ventures as much as you can and make sure you always contingencies for the situations that didn’t turn out according to your expectations. Here are a couple of strategies you could use along the way:

• Establish a cash buffer for unforeseen expenses

• Opt for or refinance your debts into fixed installments

• Diversify your portfolio with other ventures or other areas

• Perform thorough market research before making any tangible move

In conclusion

So, here we are at the very end. We hope that the six suggestions we gave you above will help you make a better sense of the present-day Australian property market and make sure your investments are made in a safe, responsible, and beneficial manner. Granted, the Australian property market is undergoing a great resurgence at this very moment. But, not even the most favorable circumstances in the world will make you money if you don’t have a solid plan to back you up. These tips should definitely put you in the right direction in solving this issue.