According to an article published by Mortgage Port, an estimated 15.7% of Australians own an investment property. It is no wonder that property investment has become more challenging and increasingly costly in Australia.
Here are 3 unconventional strategies that you can consider in an already highly competitive property market:
Rent your home, buy your Australian investment property
It may be considered common practice to buy a home before you start investing in property, but that doesn’t mean it’s the best choice for you.
Did you know that rentvestment is an unconventional investment strategy that has lately gained popularity in Australia and it could be the way to assist you in this situation?
In short, it means renting your primary residence and purchasing an investment property elsewhere. This could be particularly productive in cities such as Sydney and Melbourne, where median home values are close to $1 million. It allows you to rent and reside close to work and be near family and friends, in an area where property prices may be out of reach.
You can also consider purchasing a property out of town in fast growing but inexpensive regions. CoreLogic’s findings from their 2018 study on the most affordable areas suggest that the Melton Council area (about 35km outside of Melbourne) is a potential place to consider, thanks to its average home value of less than $300,000.
To compare, Deagon, an outer suburb of Brisbane, has an even lower median unit value at under $124,000. By considering inexpensive suburbs, you’ll be able to break into the market earlier and build equity without the cost of making too many sacrifices.
Alternative property investment: Buy out of the box
If you face difficulties when purchasing investment property in Australia, try approaching the issue from a different angle. Think out of the box and look at properties you may not have considered before, this includes a different area or maybe even a different unit type altogether.
The ‘Best of the Best’ study by CoreLogic indicates that areas with a large value growth aren’t always the ones you’d expect. Indeed, one of the rapidly developing areas throughout the nation was Wyee Point: a tiny town an hour’s drive from Newcastle. Its median property value grew by 31.7 per cent over last year to reach a very affordable $478,560.
Another potential suburb is Yayalup: a tiny region 219 km south of Perth. Its average estate value rose by a whopping 144.4% over the five years ending September 2016. While capital gains aren’t everything, these suburbs demonstrate that investing in unconventional locations can reap huge returns.
Get creative with your finances
Data released from the Australian Bureau of Statistics reveals that estate investors hold $12.8 billion in fixed-rate home loans. You can be sure that many of those home loans have not been personally customised as they could have been (after all, it can be relatively straightforward to go with a standardised investment loan with your bank).
The process may be fast and simple, but if your loan is not perfectly suited to you it may cost you dearly. It’s always best to talk to your finance broker and get professional advice when it comes to finding and purchasing property.
At FutureNow Finance, there are many loan products and structures to choose from. Whether you’re purchasing your own home; investment property or refinancing your current home loan, we can help guide you and provide financial solutions for your circumstance. We do all the legwork for you and research our panel of lenders to meet your needs at a price that suits you.
We offer the following loan solutions tailored to you:
- Your first property
- Your next property
- Your investment property
- Refinancing your loan
- Renovating your property
- Building your new property
- Self-managed super loan
At FutureNow Finance, we look forward to helping you achieve your vision. Call us on 1300 013 730 or email us at email@example.com today.