Property investors across Australia
With daily expenses getting less affordable and a comfortable retirement becoming less of a reality for many people across the country, it’s no surprise that a growing number of Australians are searching for alternative ways to build wealth and secure their finances.
But how many Australians are using property investment to do this? A 2011 census shows that 7.9% of Australians (or 1,764,924 based on 2011 population figures) own investment properties. This compares to 3.4% of adults in the UK who rent out a property, and 3% of people in the USA who consider themselves to be property investors.
So, Australia is a leading country when it comes to property investment. But what does a typical investor look like?
How many properties do investors own?
The vast majority of investors in Australia own only one property – 72.8% of the total number of investors. The percentage of investors gets smaller and smaller as the number of properties owned gets larger, until we reach 0.9% of investors who own six or more homes.
It shows that although plenty of Australians are investing in property, there is only a small portion who go beyond owning one property. But by not duplicating the success of their first property and reinvesting, they may be limiting their financial potential. Not many people can significantly change their future finances with only one property – but, with two, three or four properties, you may be setting yourself up for a much more comfortable financial life.
Where are property investors buying?
Many property investors stick to the major cities in Australia. Particularly popular investment locations include Sydney, Melbourne, Brisbane and Perth. However, thanks to increasing property prices in popular areas such as inner city Sydney and Melbourne, a vast number of property investors are now seeking to buy elsewhere.
This could be for two reasons – firstly house prices are lower and simply more affordable for an investor’s budget. But secondly, areas outside of the city often have more scope to grow in house prices. In outer suburbs, property prices are more likely to be affected by new infrastructure investment, a new transport hub, a company moving its HQ to the area.
Interestingly, only 11% of investors purchase property in a state they don’t live in. At Reventon, we are ambassadors of expanding your horizons and considering further afield when it comes to your property location. It may be that the best place for you to invest is the suburb next door, but it’s important to conduct proper market research into potential high growth areas both inside and outside of your state first. Download our free property suburb report to compare rental and sales prices in your area of choice.
What type of property investors?
A growing trend in property investment is what we term ‘rentvesting’. This is where an investor will purchase their first home in an up and coming outer suburb, with the intention to rent it to tenants. The investor remains in their own rental accommodation in their chosen suburb – where they live, work and play, but can’t afford to buy. In time, the investment property helps to fund a purchase of a second property in their portfolio, or in their chosen suburb.
This increasing trend in property investment means that the initial capital that investors use for their purchase goes into a secure investment where tenants are covering costs. Each month they could be making money, rather than taking on additional financial responsibilities with a large mortgage to pay.
Other types of investing can be the traditional route where an investor raises capital by releasing equity from their own home to buy a second, and some property investors will live in the property themselves. Learn more about the types of property investors to explore which route works for you.
Why not more property investors?
At Reventon, we want to encourage more people to consider property investment as a means to secure their financial futures. We’ve supported thousands of everyday Australians to achieve their money goals through property investment.
If you don’t believe it could be a reality for you, or you have never considered property investment before, speak to one of our advisors for free. They will help you assess your current finances, and provide you with a personalised investment plan for the future.
There are plenty of ways first time investors can get on the market and make a success of property investment from any age. The sooner you start, the sooner you can start building your portfolio and reap the rewards.