The idea behind property investing is fairly straightforward, but the process can sometimes be difficult to grasp. This is why we should surround ourselves with experts – to learn from their experiences and mistakes.
When investing in property, use the well-worn path rather than jumping on some new and shiny concept.
The following three strategies have proven time and time again to deliver great results through property. Both experienced and rookie property investors can utilise these strategies over and over to achieve their long term goals.
1. Long-Term Capital Growth
this is the tortoise over the hare strategy. Cash flow is a necessary part of building your investment portfolio, but the heavy hitter in wealth creation is capital growth. Investing with a long-term view is always better. Don't forget that property investment isn't a get rich quick scheme for the most part. Sure you may realise a significant jump in market prices in a short period due to various factors (like this current Australia-wide 2020/2021 boom), but overall, you need to remember that time is your greatest ally in property. If someone spruiks to you that it is a fast way to being a millionaire, they’re not being fully honest with you.
2. Positive Cash Flow
If capital growth is the end game, then cash flow is what keeps you playing the game. The stronger your cash flow position, the better your options are. Remember to use leverage as much as you can to stay in a strong cash flow position.
Not all locations, or even property types, will have positive cash flow available from the outset. They may require some tweaking or thinking outside of the box to start bringing in the extra dollars needed. This could be putting on a granny flat/auxiliary dwelling, leasing the property fully furnished, leasing out on a room by room basis, or short-term holiday letting like airbnb.
3. Add Value
This can be done in conjunction with the other 2 strategies. You will need to look for a property that is structurally sound and needs some cosmetic improvements. Most investors think that a renovation will cost upwards of $50,000 to just do the basics, However, a strategic cosmetic renovation can bring in tens of thousands in equity uplift on top of bringing in a higher amount of rent per week, all for under $20,000 if done correctly.
If you need any help implementing one or more of the above strategies, then please get in contact with us here
Luke Jorgensen - Lush Property
Tags - Property Investment; Property Development; Renovation; Valuation; Valuer; First Home Buyer; Buyers Agent; Buyers Advocacy