As an investor that is interested in real estate, you’re probably always on the hunt for the best property investment Australia. You might be looking online yourself or working with a real estate agent to find the best deals in the country. If you’ve done research online, you’ve likely seen various opinions on what makes the optimal investment opportunities. While various property investors have different thoughts on what constitutes the best investment, there are three characteristics of any potential property investment Australia opportunity that are critical to its success.
The Top Property Investment Australia Has A Clear Timeline
A clear timeline is one of the most crucial characteristics of a fantastic deal. You can crunch the numbers all you want, but without any idea of the timeframe, you cannot plan your finances accordingly. Are you looking for a property that you will buy and hold forever in pursuit of passive income? Or, are you seeking a home that you can stay for a few years and then sell for a profit? These two goals are very different and typically don’t result in the same investments.
If you’re looking for a property that you will buy and hold forever, then you’ll want to optimize for passive rental income. What value the underlying asset has is (somewhat) irrelevant. You want enough monthly money to make the capital expenditure worthwhile. Conversely, if you’re looking to get out fast, you want to invest in a place with potentially significant capital appreciation.
The best property investment Australia is one that you know the timeline for and it matches with your expectations as well.
Of course, an investment property without significant returns is not a property you would want. The Commonwealth Bank of Australia suggests aiming for a rental yield of 5.5% or higher. They also suggest that if the return is below 4%, then the property is too expensive. Of course, these are merely guidelines. You have to decide on how much risk vs. reward you’re willing to take on for this investment. However, when looking at the best deals, the ones with the highest possible profits are, obviously, the most optimal!
An Exit Strategy
If things go south (e.g., you have an extended period where you have no potential renters), then you need a way to “get out” of the property without losing a fortune. Putting all your proverbial eggs into one basket is generally not a good idea. Investing in highly sought-after areas tends to mitigate the risk that you might be “stuck” with an unwanted property. Conversely, if you invest in a home out in the middle of nowhere, then you might find yourself unable to sell it if things go wrong. The best deal will have a reliable and viable exit strategy. You don’t want to lock in your money to a property that is hard to re-sell if things go wrong.
Property Investments Are Fantastic Ways To Diversify Your Portfolio
The best property investment opportunities in Australia are fantastic ways to diversify your portfolio. When you find a property that has a clear timeline, significant returns, and a viable exit strategy (in case there are issues), then you will have found a fantastic deal!