7 Common Property Investment Strategies in Australia

Tuesday, April, 2019

Before buying any properties, you need to decide what is your investment strategy. Here are a few of the most common property investment strategies in Australia.

1. Home Ownership.
This is by far the most common investment strategy in Australia with over 70% of households owning their own home. This strategy simply involves purchasing your own home in order to live in it.

2. Buy and Hold
This is also referred to as purchasing or investing for the long term. This is when you purchase a property and you hold it and rent it out. This is the most common strategy for Indonesian investors.

You then hope that the property is going to go up in value over time as a result of the market going up. You also intend to eventually (though not always) make money through rental income.

3. Positive Cash Flow
This is where you purchase a property primarily for its income generating purposes. The property may go up in value as well but that’s more a side effect to the main purpose of the property which is to generate you a passive income.

Passive income property or positive cash flow property works because the rental income coming in from the property is greater than the expenses going out. This means that each month, each week or each year you have money left over that you can then use to pay down the mortgage, to reinvest or to use towards your lifestyle.   

4. Property Syndicate
This is where you purchase into a property syndicate or you purchase into a property fund and they go out then invest for you and you get a portion of the revenue or the profit that is generated from these property shares.

This is a way to step back but still invest and can be good if you don’t have the full deposit to go purchase a property by yourself. Always research each syndicate in great detail before entering into an agreement.

5. Partnership
Partnerships can be a great way to minimise the amount of deposit that you need or they can help you afford a property where maybe you couldn’t get the serviceability otherwise.

You do need to be careful with partnerships because the full liability of the loan will rest with you if your partner decides to go off and disappear. This can also make servicing future lines more difficult, because even though you only own half the property the full mortgage value will count against your serviceability. So it can end up stopping you from getting loans in the future. However, if you have no other way to get into the property market by yourself then partnerships are maybe something that you would want to do.

6. House and Land Packages
This is where you purchase a block of land and you go about building a house on that land. This is very popular at the moment because a lot of the state governments are actually offering grants or concessions to people who are building new properties.

So there you have 6 common investment strategies that people use when purchasing property in Australia. Hopefully you can find the one strategy that works for you.


Source: https://onproperty.com.au