How can you create wealth through residential property investment?
The idea of investing in residential property is considered so intimidating by some, it’s often avoided entirely as a vehicle for wealth creation. The thought of finding the perfect property, applying for a sizable loan, navigating taxes and transfer duties, and finding an acceptable tenant, is enough to make any aspiring new investor turn to easier options – with far lower barriers to entry and less commitment.
However, with investor sentiment for residential property investment sitting at over 70% for the past two years* – the professionals agree that investing in property is a smart approach to long term wealth creation.
If you’re new to the residential property investment game there are a number of factors to consider before making the leap. You have probably heard that property is all about ‘location, location, location’ and this rings true. Finding the right property (perhaps try shopping for a home like an economist?) in the right area is key, as some areas are considered reliable options with fairly stable growth (think leafy suburbs with secure neighbourhoods, great schools, good transport links etc.), whilst others may be inherently more risky, with greater growth potential in the short term (think up-and-coming, inner city apartments in areas currently undergoing rejuvenation). You also need to be sure you can afford to finance the property and that your current budget allows for what can be a very large upfront investment. You want to try and get finance that requires as little of your own funds as possible, with loan repayments that will mostly be covered by the rental income.