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The key ingredients to property investing

Property investing is all about strategy. It’s about determining where you are now, and where you hope to be, then devising a plan that will help you meet your financial aims.

Ultimately, investing in bricks and mortar should help you become financially secure and independent, setting you up for a bright future ahead.

But to do that any property investment strategy should factor in two main elements. So, let’s take a quick tour of the key ingredients to property investing…

Income versus capital growth

When you look to invest in property, it’s about considering both the short and the long-term. On the one hand you need to consider how you will service the mortgage, and whether that property will earn you income each month and each year.

On the other, you need to look at whether that property will increase in value over time, providing you with the capital growth you need to either re-invest or enjoy a significant payout when it comes time to sell.

So, let’s dive a little deeper…

Income

Ideally your investment property should be making you money in the short-term from the rent that is paid by tenants.

When considering this income, it’s important to first factor in expenses, including:

  • Mortgage payments
  • Council rates
  • Repairs and maintenance
  • Property management fees
  • Insurance

The rent that you receive above and beyond those expenses is the income you will enjoy from the property in the short-term.

Capital growth

Capital growth is akin to the big-picture approach to your investment property. It’s the value that your property will increase by over the long-term weighed against factors like inflation.

For example, the median house price in Australia in 1993 was just $111,524, but by 2018 had increased 412 per cent $571,424, averaging a 6.8 per cent increase each year in that period.

Of course, some years see more growth in property values than others, and some areas offer more potential for growth, and that’s what needs to be factored into any property investment strategy.

You also need to consider your time-frame.

Property investing is all about strategy

Once you know the key ingredients to property investing, it’s all about creating the right strategy to meet your needs, looking at further factors like your timeframe, budget, and financial goals.

In other words, you then need to find the right property, with the right income and the right potential capital growth to achieve your aims within the right timeframe.

And that’s where we come in.

How we can assist

When you work with Property Friends, we take a customised approach to your individual property investment strategy, looking at where you are now, where you hope to be in the future, and the best path to get you there.

Our sole focus is to provide accurate, unbiased investment guidance and support by developing a personalised and customised strategy that will work for you, while mitigating risk.

We then scan the market for the right investment that matches that strategy.

Ready to take the first step? Book an obligation free discovery call with us here.

Property Friends provides solutions for people aspiring to financial independence, choices in retirement, or leaving a legacy.

Enter your details here to get access to our white paper on How To Avoid The 7 Biggest Mistakes When Investing In Property

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Looking to understand the world of property investments better? We can help!

Uwe Jacobs Property Strategist

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