What You Need To Know About Investing In Property In Australia

What You Need To Know About Investing In Property In Australia

Every year more and more Australians dabble in the property market as investors. These days, it’s become far more than just owning a home to live in. Aussies realise real estate investing and building a portfolio can generate passive income and ultimately lead to financial freedom. Australia has also proven to be fertile ground for foreign investors as well looking to cash in.

If you’re just getting started in property investing or are thinking about dipping your toes in, there are some things to be mindful of before you take the plunge and that’s what will be covered in this article.

Official Interest Rates Are On the Rise

The Reserve Bank of Australia (RBA) has kept interest rates at record lows during the Covid pandemic but with life returning to normalcy and inflation on the rise, the RBA has promised a series of interest rate hikes throughout 2022. What this means is that home loans will become more expensive in many cases, so budding investors will want to be aware that investing in Australian property now is likely going to be more expensive than it has been over the past few years.

Property Prices Are On the Rise

While it’s not necessarily the case in every location in Australia, the majority of the country is seeing the cost of housing and apartments going up. This can be good news for investors who are already established in the market but it can make the prospect of investing harder and more daunting for the first time investor.

Combine rising interest rates with the rising cost of housing and suddenly everything is more expensive.

It’s Not All Doom and Gloom Though

Despite the cost of everything going up in 2022, there are still many great opportunities out there for the savvy property investor, but it takes some research and homework. There is nothing to be gained by rushing into the real estate investing game, as you’re likely to make a bad choice that could prove costly.

Instead, you’ll want to read all you can about the state of the market and learn where the growth areas are. While some parts of the country are seeing an increase in property prices, the amount property owners can demand for rent in many of those areas is also increasing. This offsets the price hikes and enables investing to remain a profitable enterprise.

Investors need to look for areas that are trending, where people continue to move to despite rising prices. It’s those key areas where rental properties will be in demand even when the price is higher.

What you don’t want to do as an investor is make the mistake of investing in a location where housing prices are dropping, as your chances of losing money on your investment are higher. You’ll be paying more for your home loan for a house that’s valued lower than it used to be; one that may or may not increase in price again. What a landlord can command for rent in those areas may also drop in alignment with market prices.

Don’t Limit Yourself To Your General Location

If the idea is to build an investment portfolio, you can invest your money anywhere in the country. It doesn’t have to be limited to your own backyard. Rather than investing in an area near you that you’re unsure about, it’s a far better idea to widen your search grid and focus on those hot spots talked about before.

You’re not planning on living in the property yourself anyway, so it doesn’t really matter where your investment property is located.

You Need More Money Than Just the Purchase Price

If you plan to invest in property to produce a rental income, you’ll need extra cash for things like maintenance and upkeep of the rental property and any other related expenses. It’s far from being a case of simply purchasing a property and the deal is done. Property investing is an ongoing commitment financially.

Work With An Experienced Property Investment Consultant

What You Need To Know About Investing In Property In Australia

Both new and experienced property investors in Australia can benefit greatly from working with an experienced property investment consultant. When choosing a consultant to work with, be sure they are also a property investor themselves and not just someone making money playing at property investing.

A good investment consultant will be able to help you put together a property investing plan and strategy, as well as helping you to define your investment goals.

They will also be able to advise you on the best spots to invest your money, as it’s part of their job description to be constantly diligent and informed about what’s happening in the property industry all around the country.

Your consultant can also offer you regular advice, review how your current investments are going, answer any questions or concerns you may have and also help you make any necessary adjustments to your investment strategy.

Sign Up For a Property Investing Course

There are numerous professional courses conducted in Australia that teach beginners everything they need to know about investing in real estate and making a profit. If you’re brand new to property investing, it would be worth investing some time and a small amount of money in one of these courses. Rather than going into the market totally green, you’ll be armed with vital knowledge and information, enabling you to make better and more profitable decisions.

Another advantage of doing a course on investing is you will make some vital industry contacts. Many of these courses offer tips and suggestions as part of the deal and ongoing support even after you’ve completed the course.

The Conclusion

There is always opportunity for successful and profitable real estate investing in Australia, no matter what the current state of the market is. Do your homework, find the growth areas and hot spots and put your money and faith into those locations. Property investing is one of the safest ways you can invest your money.