As a property investor, what do you need to learn this year? Chan & Naylor accountants in Melbourne give expert advice on property investment for 2018.
Property markets are very dynamic and can prove to be pretty tricky. You learn and develop every year because things change. Our first important tip is to not to be emotional when it comes to investment decisions.
Did you know that markets overreact, overshoot or get too depressed mainly because of market sentiment? You shouldn’t get too carried away when there is a boom or slump and remember that market cycles mean booms will lead to downturns, which leads back to another boom. The real money in property is made over time. You should always start off with a long term view in mind, a 10 year hold is not an uncommon period to expect to hold the property.
Property markets move in cycles despite steady or dropping prices. On average, well located properties increase in value by about 8% per year over a long-term so you should take a long-term perspective when it comes to property investment. Property investment is actually how you play with finance so it may be a good idea to talk to accountants in Melbourne to make sure you get a steady cash flow.
Successful investors know how to work through different lenders and hold investment grade properties to grow their portfolios. Successful property investing will rely on managing cashflow, if you do not have the right cashflow mix, no property investment will be successful because you will become disappointed as the property will require additional cash resources to be applied to it in order to maintain the holding cost.
Another thing to remember is that Australia has different property markets. The states are at different property stages and each state has markets which are segmented by property type, price points and geography. The Sydney market performs differently from the Perth market and even from the Melbourne market.
Make sure that you only buy investment grade properties. Only 2% of the 250,000 properties in Australia are considered investment grade. Keep in mind that investment grade properties attract affluent owner occupiers, are scarce and are in the right location for prospects and capital growth. These properties also have street appeal, security and high land to asset ratio and should potentially increase value through renovations.
To be a successful investor, you should follow a system that works in all market conditions and can take emotions out of decision making and speculation. This can lead to consistent profits and a reduction of risk. You should also avoid shortcuts, be patient and be wary of false and fearful predictions to maximise your opportunities.
It takes many years to accumulate assets in order to be involved in property full time. Remember that property investment is like a business. You need to get the right finance, asset protection structures, tax planning and a great team of experts to achieve property investment success.
If you would like to know more about property investment, you can click here to know more about Chan & Naylor services. You can leave your details here and we can schedule you for a free consultation. We’ll contact you to explain more.
Whether you are a beginner, seasoned investor or business owner, our property and business tax accountants can give you guidance to maximise the financial areas of your life. We can also give you an integrated and tailored solution of your superannuation, taxation, property investment, asset protection, estate planning and more.
Chan & Naylor Group has nationwide offices in Brisbane and Capalaba in Queensland, Melbourne and Moonee Ponds in Victoria, East Perth in Western Australia, and South West Sydney, Parramatta, Pymble, North Sydney, and Sydney in New South Wales.
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