How To Invest In Real Estate

Gone are the days when real estate investment was only for the rich and famous. With sound financial management and the right strategy, you can invest in a property and grow your wealth.

Reasons to invest in real estate.

Investing in real estate comes with attractive benefits. Passive income is one of them. There is no shortage of property renters in Australia.

Economic constraints and lifestyle changes are the most common reasons some people prefer renting to buying a house. This is good news for real estate investors and a perfect example of making money work for you.

Having a rental property allows you to make money while keeping a full-time job or looking for other investment opportunities.

Real estate properties tend to appreciate over time, and data shows that Australian housing prices have increased by more than 7% per annum since the 1980s. Seasoned investors used the buy-and-hold strategy to get the most from their initial investment.

Whether you buy commercial property or abandoned property, there’s always a good chance you’ll get more when you sell it a few years down the road, especially if it is in an excellent location.

It’s also worth mentioning that you may be eligible for tax deductions as a real estate investor. Landlords can claim deductions on their rental property for the tenanted period.

How to invest in property with little money

Investing in real estate often creates fear in many individuals looking to grow their investment portfolios.

Despite the abundance of available information on how to buy an investment property, several people are hesitant to jump into real estate investing because of thinking that it requires millions of dollars.

But do you know that you can invest in real estate without owning a property?
Real estate investment trusts (REITs) are ideal for individual investors who want to experience real estate investing without purchasing a property.

REITs are companies that operate income-producing real estates like hotels, office buildings, malls, resorts, warehouses, and apartments, to name a few.

The three types of REITs are:

· Equity REITs
· Mortgage REITs
· Hybrid REITs

If you’re new to real estate investing, publicly-traded REITs are mostly recommended. It’s similar to investing in mutual funds, whereby you purchase shares using a brokerage firm.
High-income yield is one of the advantages of investing in REITs.

And compared to actual property, it’s quicker and easier to sell your shares—no paperwork, bureaucracy, advertising, or endless phone calls.

However, it’s to be expected that REITs have their downsides, such as low growth, market risk, and zero control over performance.

Investing through online real estate platforms is another way to invest in a property. Like real estate investment trusts, the investor is not required to buy property. Most online real estate platforms are user-friendly. Minimum investments range from a few hundred to over a hundred thousand.

Online real estate platforms pool the money collected from multiple investors to finance projects or ventures. This type of real estate investment is most suitable for investors who don’t have an immediate need for money.

Buy abandoned property in Australia.

If real estate investment trusts are too complicated for you, try investing in a physical property. We’ve seen a handful of individual investors buying abandoned properties, renovating them, and selling them for a good profit in recent years. Think of flipping houses.

The apparent downside of buying and flipping properties is it requires too much work and high out-of-pocket costs. You’ll also need to secure clearance before commencing the renovation.
There are a few tricks to minimize the high costs of flipping properties. To begin with, look for a property that doesn’t need significant repairs and restoration.

Check as many abandoned properties as possible in different locations. Ask friends, family, and colleagues or check brokerage services to recommend the best places to buy investment property in Australia. With patience, you will be able to find the right property in the right location at the right price.

Rental property investing

When researching how to invest in property, it’s impossible not to come across the topic of rental properties. One of the desirable benefits of rental property investing is steady cash flow. It’s also considered a good source of passive income because you continue to make money while sitting back and relaxing for as long as your property is tenanted.

There are two ways to make money with rental property. One is to offer the property a long-term rental where the tenant occupies the property for a year or so. This assures you a fixed monthly income that you can use to cover part of your mortgage payments.

The other option is to offer short-term occupancy. A popular example of short-term rentals is those posted on Airbnb, and the tenant can stay overnight for a few days, weeks, or months in this arrangement.

How to invest in real estate in Australia

Real estate is a lucrative business. No wonder many individuals and institutions are willing to invest in the industry. Whether you’re interested in real estate investing or planning to diversify your investment portfolio, here are some tips on how to invest in property in Australia:

1. Do extensive research before you dive in. Learning how to invest in real estate is through earnest and persistent readings.

Search the Internet for reliable sources of information. Take time to understand property markets and other real estate investing options available.

Know the exit cost or penalty fees, interest rates, tax deductibles, and potential return on investment for the various ways to build up your portfolio.

Understand all the costs involved in acquiring and repairing the property if you intend to purchase a property for rental purposes.

2. Review your finances. This will help you decide where to put your money. Having a rental property may be what your heart has desired for the longest time.

Most banks will require a 20% down payment for a home mortgage. Suppose you don’t have the available funds for the down payment.

In that case, you may consider real estate investment trusts in the meantime as your initial foray into investing in the property market.

3. Work with the experts. Navigating the world of real estate investing can be pretty complex, especially if you’re a new investor, and this is where brokerage firms can be beneficial.

Contact us now and let our real estate virtual assistants help you with your success when you invest in property in Australia, or if you decide to use equity to buy property, while learning the process of owning real estate and property investment remember,  property prices impact your income stream in the future.

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