Cash-Flow, Renovation or Capital Growth
- September 6, 2020
- Posted by: wpgroup
- Category: Business plans, Economics, Finance & accounting, Future trends, Investment Property
There are a few ways to make money through property: a positively geared property which delivers income through rent, a buy, flip and sell strategy which sees the investors improve the home and its value, and a capital growth strategy which involves buying a well-priced home and sitting on it as its value grows..
The safest strategy is to buy and hold for the long term capital growth. you can focus on achieving passive income and capital growth through positively geared commercial and residential properties.
What’s the strategy?
You have to make sure that our strategy focused on buying properties within five to 10 kilometres within the capital city of Melbourne, Sydney or Brisbane,” Generally, capital city home values perform better over time than regional homes. In the last year, Australia’s combined capital cities have recorded a median value increase of 11.5 per cent, while regional homes have grown 8.7 per cent.
- You should leverage your superfund, (SMSF) which has also doubled in value now.
- You always focus on high demand in areas where there were owner-occupiers – where people actually wanted to live and not the bargain basements,”
- Look at one or two bedroom units brand new. where possible to avail the tax benefits with depreciation etc.
- Use a spreadsheet to track costs, growth and the benefits of investing in certain areas.
- Debt for a home that is growing in value is “good debt”, as opposed to the “bad debt” of credit cards or car loans, as that debt isn’t working for you.
But when it comes to making the big decisions, when preparing your strategy is to ask for help: surround yourself with a financial adviser, a good accountant, strong property managers, legal advice and a buyers’ agent.
- We’ve got a buffer of people around us while we get on with our working jobs and that’s helped us. We’ve also had quite tight control over our finances, in the sense that building up our buffers was one of our big assets,” she said.
- So we’ll talk to your buyers’ agent and property strategist to work on which states we should move to [in terms of investment].
The Wells-Peris Group runs a business helping other Australians invest in property, has a strategy.for the various risk appetites as all are not the same. For example you can focus on commercial property and residential properties with granny flats or duplexes etc.
Look at how much the property will put back in your pocket after looking at expenses, so look at how much your outgoings are, how much your mortgage repayments are and have a standard of only investing where for eg. the yield is 5 – 6.5 per cent,” .
Yield is a measurement of an investment’s future income and is usually calculated annually as a percentage of an asset’s cost or value. Yield is based solely on rental income, while a return includes capital gains.
- To calculate yield, deduct ongoing costs including the costs of vacancy from the investment’s annual income.
We are going to see low interest rates for a long time to come and now it is the time to review and act and take advantage.
You may contact us if you seek assistance and we will provide you the tools at no cost. We have the best product mix to suit any situation be it refinance, SMSF,or purchase also investment strategy to build your portfolio.