• 7 mins read
Australian property investment can prove to be very rewarding, and like all financial decision making, it’s essential to approach building your investment portfolio with careful consideration and research.
You may be looking to add a new industry sector to your current property portfolio or considering diversifying your investment into property management.
Whatever your goals, at The Property Advisory (TPA), we have a range of property investment options to suit your personal investment and wealth building goals. We’ve been acquiring and managing blue-chip Australian property since 1993, and our experienced team have put together 5 top tips for your investment journey.
Here’s what you need to know when you invest in property in Australia
1. Set clear investment goals that align with your life stage
By identifying what you want from your property investment – solid yield, rental income, capital growth, long-term capital appreciation, portfolio diversification – you can set clear financial goals that fit with your lifestyle, allowing you to select your course of action with intent.
When you invest in commercial property, you can diversify your property portfolio to meet your personal wealth building strategy and goals by investing across different geographical locations and property types. This can help mitigate risk and maximise potential returns, and allows you to choose conditions you are comfortable with. Factors will include your life stage, personal investing or family trust investments, and how commercial property investment fits with your current overall portfolio.
2. Research the market thoroughly and conduct due diligence
Before making any investment decisions, all good investors do their research! At TPA, we are always available to answer any queries you have about your current portfolio as well as future property investments.
Consider researching historic market data, as well as specific industry trends and forecasts. Macro and micro economic conditions will play a large part in decision making, as well as your own personal financial situation. If you are embarking on a career, you will have different goals compared with if you are approaching retirement.
It’s also important to understand key property factors including supply and demand across industry verticals, local property trends, rental yields, and vacancy rates in the specific locations you are considering investing in.
Once you’ve considered the market factors, before finalising any property purchase, you’ll need to conduct thorough due diligence. This includes property inspections, obtaining building and pest reports, reviewing contracts, understanding zoning regulations, and researching any potential development plans or restrictions that may impact the property’s value.
3. Choose a location with growth potential
If there is one factor every single property investor agrees on, it is location! And with commercial property, good locations come in many forms – business hubs, arterial roads, interstate highways, and shipping docks can all play a part.
Choose a location with strong growth potential, good infrastructure, amenities, and proximity to transportation, schools, and employment hubs.
High-growth areas and growth corridors, such as Melbourne’s fastest growing northern corridor, tend to offer better prospects for capital appreciation and rental demand.
Another consideration to capitalise on growth potential is property management for rentals. Growing businesses prioritising capital for inventory need additional space, and hence blue-chip property to house it.
Additionally, if you’re planning to rent out your property, engaging a professional property manager will save you time and effort, handling tenant selection, rent collection, property maintenance, and ensuring compliance with relevant laws and regulations.
4. Plan your finances and budget carefully by exploring financing options and comparing rates
All good investors are armed with viable budgets. Being realistic allows you to invest with confidence, and you’ll be well-placed to deal with associated costs (such as purchase price, stamp duty, legal fees, ongoing maintenance, property management, and loan repayment).
We advise you to research extensively and explore the different financing options available to you that align with your lifestyle and your investment goals. These will be affected by your life stage, your investment strategy, and your personal finances.
Factors such as mortgage terms, loan amounts, and interest rates all come into play. You’ll need to carefully question and compare several lenders and brokers to find the best competitive rates and favorable terms for your personal situation. You can engage a mortgage broker or financial advisor to assist you in finding the most suitable financing option. And always seek professional advice from experts who can help you stay informed about market changes and regulations.
5. Stay Informed
Another trait of excellent investors is to keep up to date with market conditions and other factors affecting their property portfolio investment. Changes and fluctuations in the property market such as planning and interest rates, government regulations, and tax laws affecting property investment are all key elements to managing your property investment. By regularly reviewing your investment strategy, you can adapt to market conditions when necessary.
Property investment, like all investment, does involve risks, and it is crucial to make informed decisions based on thorough research and professional advice in line with your personal investment portfolio goals.
When you invest with TPA, you are partnering with a knowledgeable, local, and specialised property investment advisory for Australian property. If you’re looking to add to your portfolio, diversify your investments, or start off a brand new investment journey, contact our team today.