It’s no secret that property investment strategies are one of the most effective ways to generate cash flow, with over 2 million Australians currently in the market.
But property investment is quite a broad term in an industry where there are so many strategies available. It can be rather confusing which leaves many investors getting stuck right off the bat when deciding which path to take as they don’t have a clear strategy in mind. There are many strategies that can be implemented to create the best returns on your investment.
Here are 5 of the most common property investment strategies that are seeing regular Aussies just like you achieve their financial goals:
1. Buy and Hold
The underlying idea is that properties will always appreciate over time. And, as a result, you get to enjoy the benefits of a steady income flow as well as your property going up in price.
The key to finding a suitable property to hold onto is research. You need to know the ins and outs of your target market, what appeals to renters in the area, and how to increase your property’s value over time
This is generally considered a low-risk strategy that can minimise your tax and does not generally require a lot of effort once purchased. It is also a long-term property investment strategy.
2. Renovate and Hold
The idea behind this strategy is buying a property under market value, renovate and then hold, in order to maximise gains by ideally selling at peaks in the housing market.
3. Negative Gearing
In short, negative gearing will make you money if the property’s long-term capital growth is greater than the loss you make in rental shortfall.
4. Positive Gearing/Positive Cashflow
Put simply, a positively geared property (also known as a ‘cash flow property’) is an investment that generates more in rental income than it costs in loan repayments, strata fees and other expenses associated with ownership.
This kind of property investment strategy provides additional income which can be used to pay the loan down faster, or invest elsewhere.
Positive gearing is generally seen as lower risk than negative gearing, as it provides more predictable returns and consistent income.
5. Subdivisions and Developments
This strategy is definitely recommended for more experienced investors that understand how to deal with councils and the development process. It entails the conversion of a single block of land into two, or more, plots.
This way they get to capitalise on the property’s land value, whilst maintaining the existing property as a source of cash-flow.
There are most definitely pros and cons to every kind of property investment strategy. A good investment strategy considers the investor’s personal situation, their goals, risk tolerance and future income requirements.
With so many options on offer, property investment can become somewhat of a daunting experience. It’s our goal to take the stress out of this process and help to guide you and determine which strategy is best suited to your particular circumstances.
We can help!
If you are considering purchasing an investment property, now is the time to buy. Why? Because loan interest rates are still low—less than 2%. When the interest rates begin to climb, it will cost you tens of thousands if not hundreds of thousands of dollars more. When purchasing a property, it’s important to have someone with the knowledge you need to make the right decision. That’s where we can help!
Ready to start creating passive income with property? Think you’re ready to invest in one or more properties?
We can help! At OneCorp, we walk you through every step of the process at NO cost to you. We create a personalized property strategy and help you find the best opportunities on the market, so you know you’re getting the best return.
Getting started on your investment property journey has never been easier:
- We start by helping you set clear goals and objectives as to what you want to achieve through property investment.
- From there, we run the numbers through proprietary software to accurately assess exactly what you need out of a property portfolio to achieve those goals.
- Lastly, we find the perfect property to make those objectives a reality!
