First time investors, is now the right time?
Yes, according to RP Data’s National Research Manager, Tim Lawless. We agree. With an inviting, low interest rate environment, a moderate softening of property prices, record-low vacancy rates and strong returns, now is an opportune time to start your investment portfolio and take advantage of a rare set of conditions in the Australian property market and economy. While the following lists some of the basics you need to know, your agent can provide more important information on this very important decision, as well as stress-free property management and ongoing support for long-term security.
- Be clear about your investment goals, both short and long-term, from the outset, as this informs your decisions. Is the aim to retire earlier or richer, to supplement current income, or to completely replace it?
- Knowledge is power. Thorough research on the past, present and predicted performance of different types of properties in different locations is crucial, as is learning as much as possible about investing in the property market.
- Investment experts generally recommend investing in demand housing, such as residential property, rather than in lifestyle investments such as holiday homes.
- Ensure you are in a sound financial position and that realistic budgets factoring in ancillary costs and possible interest rate rises have been prepared – with the assistance of a trusted advisor. The aim is not only to accommodate your investment, but to grow and protect it.
- Investment tax can be complex, so an accountant who specialises in the area is recommended.
- Why invest in property? Capital growth, rental income, tax benefits, lower volatility than the share market, and high demand given everyone needs somewhere to live and that Australia’s population is booming.