Should you purchase an investment property?
Buying a property – whether for an investment or to live in – is always a big decision. There are plenty of factors you need to take into consideration, and there are lots of things to tick off your list during the purchasing process. But what if you have been gearing up to buy a property, you’ve raised your deposit, and now the market conditions are not ideal? You might think you need to wait until the market corrects itself and starts the grow, but this isn’t necessarily the case.
Averages are averages
When media headlines are telling you that the property market is in a downturn, remember that the figures that are being used are averages. Typically, averages are dragged down by expensive homes in big capital cities losing their value, but there are plenty more properties in Australia than townhouses in Melbourne’s swanky Prahran or villas in Sydney’s northern beaches. This isn’t to advise you to ignore the discourse on the property market – it’s always good to understand what the market is doing – but remember that there are plenty of markets across Australia, and even within regions and cities, so it’s important to focus on your area of interest rather than the national average.
The value of property market analysis
This brings us onto the value of good analysis of the property market. If you want to know whether it is a good idea to invest in a certain market, you need to know the details – how much rent could you expect? What is the average sale price? What is going on in the local area that could make it attractive to renters? This is all need to know information about any area you are considering purchasing in – and if the details don’t add up, don’t be afraid to think outside the box and take your search elsewhere. You will almost always be able to uncover an area or suburb that is experiencing healthy growth, with attractive yields for your property investment.
Get back to property investment basics
Whatever is happening in the property market, the property investment basics always apply. This includes finding a high growth suburb, checking out the proximity of the property to facilities like transport, schools, and entertainment, searching for new infrastructure investments in the area, and plenty more. Not only that, you should ensure that the funding works out for you, and that you are not over-leveraging when searching for a property loan deal. It is advised that you work with a trusted expert to take you through these steps. Stick to these basics, and your property investment will be secure for the long term.
A buyers’ market
If the property market is wavering, it actually offers a chance to make a deal on a property you may not have otherwise been able to afford. If the media is reporting that the market is slowing, the market will react to that. Buyers become nervous, and the prophecy becomes self-fulfilling. If you are in a position to, now is your chance to make a daring bid on that property you’ve had your eye on. You never know, the owner may be keen to sell and have had fewer offers than they were expecting.
Think long term
All of this advice goes hand-in-hand with the idea of thinking long term for your property investment. If markets are uncertain, then there may not be significant growth in the next year or two years, but the rate that properties rise in value over the period of a property market cycle (generally seven to 10 years) is significant. So it’s important to look ahead and build your wealth for the long term.
Get your plan together
It’s important in any market to ensure you have a plan in place, and even more important in an uncertain market. At Reventon, our team of experts can help you develop a wealth building plan as per your life goals and current circumstances. What’s more, you can get a free advice session to kick things off – we’ll even visit you at home. Find out more or book your consultation now.