6 common property investment strategies used by Aussie property investors

Buying, owning and enjoying a home is the end goal for many Australians.

If you’re keen on becoming a property investor or wanting to maximise your existing portfolio, there are different strategies you can implement to do so.

Want to know 6 common property investment strategies used by Aussie property investors?

Read more from the Perth property management team at Thought Leaders Real Estate to discover these strategies.

Owning your home

Owning a home isn’t only a dream for everyone, it’s already a reality for some. In fact, owning your home is up there as the most popular way to make money in the Australian property sphere.

While owning your home doesn’t spring to mind as being an investment strategy, it still provides many attractive benefits.

What are these benefits?

The property is free from Capital Gains Tax, and

Likely to rise in value, especially if held on to for a long time.

Of course, there’s positive emotional and lifestyle factors of owning your own home, too.

Buy and hold

Most industry advisors recommend this property investment strategy.

What does it mean?

Acquiring a property with the intention of generating long term capital growth.

Commonly, property is bought with borrowed funds which will appreciate in value over time.

Live-in tenants will help pay off the mortgage.

Property investors who buy and hold use their increasing equity to purchase the next property in their portfolio, with thanks to increasing property values and rent.

The buy and hold strategy in property investment can be very beneficial and low hassle with the right asset selection and the benefit of time. You need only be patient.

Negative gearing and positive gearing

Negative gearing refers to a property investment where the annual expenses are greater than the rental income. Naturally, this leaves investors at a loss, but as it stands, can be claimed as a deduction against investor’s taxable income.

On the other hand, there’s positive gearing – which sees a property generating higher income than expenses before depreciation is considered.

These properties are often hard to find but are seen in remote towns where population growth is low, or in student accommodation properties and short-term rentals.

Positive cash flow

These properties put cash into the investor’s pocket after depreciation is considered.

Newly built and newly renovated properties, due to depreciation benefits, stand the greatest chance to deliver positive cash flow.

Flipping a property

A handful of property investors are skilled at ‘flipping’ properties. Flipping refers to renovating a property to manufacture equity, allowing a quick and attractive sale.

How to succeed in flipping:

Accurately calculate the renovation potential of a given property

Spend time and money on value-adding improvements only

Control costs and avoid budget blowouts

Get it done quickly (without cutting corners).

Block splitting

This involves buying a block of land (with the right zoning) and splitting it up into two or more sections. You’ll see this is fast becoming a popular strategy amongst property investors.

Let Thought Leaders Real Estate help you reach your property goals

Thought Leaders Real Estate understand the Perth property market from all perspectives.

We’re here to help you find the perfect property, from the next one in your portfolio to your forever home.

Contact Thought Leaders Real Estate today.