Real estate investment is a process of acquiring and/or renting out properties for profit. It is generally deemed as a good investment option for multiple reasons. It can generate passive income, which means it works even while you’re at rest and you gain more time to do whatever it is you enjoy.
Real estate investment in Australia is a long-term business opportunity, as this type of investment appreciates over time. Due to the increased demand for rental properties, real estate investments have become more appealing to buyers looking to invest and those who are looking to be landlords.
Given this knowledge, it is also important to consider the fact that investing in real estate can have its own set of challenges when decisions are not considered thoroughly and properly. Every investment poses a risk that’s why it’s always important to ask whether investing in real estate is right for you or not.
You can start with:
Let’s face it - buying a house, an apartment complex, or any piece of land for that matter can be expensive. And this is not taking into account the maintenance costs and taxes; when you put all that into the equation, it can be a different situation altogether.
Experts believe that when you can afford to pay the property in cash, it means you can pretty much afford the mortgage payments even without depending on rental income. Remember that real estate investing should generate income as time passes, not become a financial burden.
Purchasing and investing in real estate isn’t an overnight decision. You need to identify the reasons why you want to invest and the goals you have for your investments.
For homebuyers, purchasing real estate can help build equity for the future. An advantage of investing in real estate is that you are able to build equity that is greatly connected to one’s net worth. If you are able to pay off your mortgage, you build equity. As you build equity, you now have the leverage to acquire additional rental properties and increase your cash flow.
If your goal is to increase cash flow for retirement, real estate investing can also be a stable way to increase wealth over time. It can supplement your retirement years with income gained from renting out multiple properties.
It can also serve as savings for a college education. Purchasing a property enables families to actively save through renters’ payments. When the property is paid off, you have the option to sell or continue to use it as a source of cash flow.
Whatever your reasons are for investing in real estate, you have to set identifiable and realistic goals and to accompany them. Finally, let’s not forget about…
Great research is a necessary skill when looking to invest in real estate. You need to know and understand whether or not you’re getting yourself a good deal. Research the deed thoroughly; learn if there are road closures and how it can affect property value; find out about the area and study other external factors that can affect the value of your property. Is the population growing? Is there new government infrastructure planned? Is the region susceptible to flooding?
All of these things will help you gain a clear idea of whether the property is worth investing or whether you should continue with the investment. It pays to do your homework.
When done right, capitalizing on real estate can become one of the most profitable investments you can make. Real estate investments enable Brisbane property investors to enjoy a steady flow of income and in turn, lead to financial freedom.
At A9 Property we provide free content and advice for investors getting into the Australian and Brisbane property investment market. We specialise in “off-the-plan” properties which have yet to go to market - a popular investment strategy in Brisbane and in Australia.
In addition to our regular content (like this article) we also have a carefully selected group of off-market properties listed for sale that you won’t find on any real estate sites. Check them out here.
Our aim is to provide a platform to educate and inform property investors just like you, and get you on the inside track when it comes to taking your property portfolio to the next level. Get in touch with us to find out how we can help you take the next step on your journey to financial independence.